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Problem 3 Assume that output in the economy is given by a production function that implies the following MPL MPL1 K '2 L Further assume that in the...
Consider the economy from problem 3. Assume that the government introduces new legislation that sets the minimum real wage equal to 1. After the introduction of the minimum wage, the unemployment rate in the economy is a) 10% b) 20% c) 30% d) 40% e) None of the above