Part IV: A Corona Saving Glut (12) In this problem, we study a saving glut. Specifically, assume that the saving glut can be modelled as an exogenous increase of national saving, i.e., an increase of the national saving curve unrelated to changes in the real interest rate, current or future income. The idea is: Corona makes everyone save more, but the details do not really matter for the analysis. 1) Illustrate the saving glut in the market for funds. Make sure to label the axes and the curves. Use a different color for curves that have moved. What happens to the real interest rate, saving and investment? (4) 2) Illustrate the saving glut in the commodity market. Make sure to label the axes and the curves. Use a different color for curves that have moved. What happens to the real interest rate and aggregate output? (4) 3) Finally: illustrate the saving glut in the dynamic labor market diagram and, thus, on aggregate employment and the real wage, using only the results from 1)/2) (by this we mean that the saving glut does not have an independent impact on the labor market). Are your results unambiguous? Explain briefly and label the axes. (4) Part IV: A Corona Saving Glut (12) In this problem, we study a saving glut. Specifically, assume that the saving glut can be modelled as an exogenous increase of national saving, i.e., an increase of the national saving curve unrelated to changes in the real interest rate, current or future income. The idea is: Corona makes everyone save more, but the details do not really matter for the analysis. 1) Illustrate the saving glut in the market for funds. Make sure to label the axes and the curves. Use a different color for curves that have moved. What happens to the real interest rate, saving and investment? (4) 2) Illustrate the saving glut in the commodity market. Make sure to label the axes and the curves. Use a different color for curves that have moved. What happens to the real interest rate and aggregate output? (4) 3) Finally: illustrate the saving glut in the dynamic labor market diagram and, thus, on aggregate employment and the real wage, using only the results from 1)/2) (by this we mean that the saving glut does not have an independent impact on the labor market). Are your results unambiguous? Explain briefly and label the axes. (4)