Question: Consider the real intertemporal model with investment. A war breaks out that is widely expected to last only one year. (15p) a) Determine the shock

Consider the real intertemporal model with investment. A war breaks out that is widely expected to last only one year. (15p) a) Determine the shock in the economy to model a short war. b) Determine the new equilibrium for aggregate output, employment, wage, and interest rate and carefully explain your results. Show this in your diagram

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