Problem 3 (100 points) Assume that Korea is a closed economy, and that Korea has a fixed amount of capital, a fixed amount of labor, and fixed technology. At time to, Korean households suddenly recognized that their life expectancy had increased, but the timing of retirement in the labor market had not been expanded proportionately. Households lowered their propensity to consume in order to prepare for their elderly years. 1) Describe the effects of the change on IS curve and LM curve. 2) Describe the short-run effects of the change on GDP, consumption, and investment. 3) Describe the long-run effects of the change on GDP, consumption, and investment