Suppose Canada is a closed economy and in its long equilibrium initially. The government increases its...

  

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Suppose Canada is a closed economy and in its long equilibrium initially. The government increases its subsidy to new capital investment projects. At the same time. the shortage of computer chips/semiconductors forces many manufactures to delay their spending on replacing depreciated machinery and equipment. in the context of the long run classical model, examine the effects of the above events on the following variables in the long run output real interest rate national savings real rental price of capital price level Explain and support your answer by ONE diagram for the market of loarable funds and ONE diagram for the rental market for capital Upload Choose a File O . Suppose Canada is a closed economy and in its long equilibrium initially. The government increases its subsidy to new capital investment projects. At the same time. the shortage of computer chips/semiconductors forces many manufactures to delay their spending on replacing depreciated machinery and equipment. in the context of the long run classical model, examine the effects of the above events on the following variables in the long run output real interest rate national savings real rental price of capital price level Explain and support your answer by ONE diagram for the market of loarable funds and ONE diagram for the rental market for capital Upload Choose a File O .

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