Question 2 124 points in total) Imagine a hypothetical closed economy. Suppose its production function is Y = 8 K.N.5. The capital stock is K-25. The labor supply curve is NS = 0.64 xw.t is the tax rate on labor income, and hence w is the after-tax real wage rate. Marginal Propensity to Consume is MPC-0.7. Government spending (G) equals 10. a. Find labor demand curve 12 points). Why do Marginal Productivity of Labor (MPN) and labor demand curve overlap? 12 points (Hint: either explain through the derivation of labor demand curve from profit maximization problem.) b. What is the equilibrium level of the real sage and the employment? [4 points c. What is the total after-tax income of workers? 14 points d. Given total income of workers, show that the share of capital income in aggregate income is 0.5.14 points e. What's the desired national saving in this economy? (4 points f. Suppose that a minimum wage of w = 10 is imposed. After the imposition of the minimum wage, what is the new level of employment and total after-tax income of workers? 14 points