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What will happen to marginal productivity of labor

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Recently, France's government has proposed to raise the retirement age from 62 to 64. Assume that a Cobb-Douglas production function is a good representation of France's economy, the substitution effect is stronger than the income effect, and that the economy was initially at equilibrium. Assuming all else is held constant and that the wage is flexible, given the change in the labor market, what will happen to the marginal productivity of labor if the legislation passes?

Reference no: EM133465762

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