Question: question attached 3. A war breaks out that is widely expected to last only one year. Show how the effect of this shock on aggregate

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question attached 3. A war breaks out that is widely expected to

3. A war breaks out that is widely expected to last only one year. Show how the effect of this shock on aggregate output depends on the size of the intertemporal substitution effect of the real interest rate on current leisure, and carefully explain your results. Explain with the aid of diagrams

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