Suppose that the likelihood of a future military conflict increases. This can be modelled as G unchanged, Gr increases. Use the real intertemporal model (which includes the current labour supply, N S , and demand curves, N D, and the output supply, Y3, and output demand, Y, surves) to show graphically what happens to output, employment, real wages and the real interest rate. Also, infer what happens to investment and consumption. answer all of the components of this question and label all the required curves, you.
