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Consider an economy with the production function Y = L^(1 / 3)
a) Derive the Labor demand Curve
b) If Labor supply curve is Ls = (w / p) , calculate the equilibrium levels of real wage, labor and output.
c) Assume M s = 45 and k = 3 . What is the equation of the aggregate demand curve for this example? What is the price level? What is the nominal wage level.
d) Show equilibrium in labor market / output market / money market by using the graphical analysis of "The Complete Theory of Aggregate Demand and Supply"
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