Question

poyent, and the real wage, treating G as given. EXplatyo 4. Suppose that the representative consumers preferences change, in that his or her margnal rate of substitution of leisure for consumption increases for any quantities of consumption and leisure Explain what this change in preferences means in more intuitive language hat effects does this have on the equilibrium real wage, hours worked, output, and consumption? c. Do you think that preference shifts like this might explain why economies experience recessions (periods when ouput is low)? Explain why or why not, with reterence to the key business cycle facts in Chapter 3 Suppose that govermmentenend:

Answer 1