Long-run classical model from Chapter 3. You must provide properly labeled graphs to get full credit 3) A) Suppose there is a permanent increase in the labor force (L). a) What will be the impact on the real wage (W/P) and the real rental price of capital (R/P)

Below the classical model, economic growth is necessarily achieved because of stability in the wage level. For instance, one case of unemployment predominates at a real wage (W / P)1.

Currently, the excessive labor supply would lower the actual wage level before labor supply equals its demand. Eventually, real wage rates would decline to (W / P)F, whereby aggregate labor demand is perfectly matches by aggregate labor supply.

Only the supply side of the production market for products defines the quantity of output & jobs in the classical model.

As the classical method is supply-determined, it states that equiproportional increases (or declines) will not alter the supply of labor in both the rate of money wage and the price level.

all group life insurance is term insurance. actually it is annual renewable term and it is rated on the average age and claims experience of the entire group, which is called "experience rating." remember, this type of insurance has a 31-day grace period and is convertible to whole life upon leaving employment. a contributory group plan requires that both the employer and the employees pay part of the premium. at least 75% of those eligible must participate, so the group is sure to get most of the healthy employees as well as those that are sick.

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