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Use the lS-LM model to determine the effects of each of the following on the general equilibrium valuesof the real wage, employment, output, real interest rate, consumption, investment, and price level. (a) A flow of emigration out of the countrie...

(a) A flow of emigration out of the country will shift the labor supply curve to the left, resulting in an increase in the real wage and a decrease in employment. This will shift the IS curve to the left due to decreased consumption and investment, resulting in a decrease in output and real interest rates. The price level will also decrease due to lower demand.

(b) An increase in stock price volatility can be interpreted as an increase in risk aversion among investors. This will result in a decrease in investment spending, shifting the IS curve to the left. This leads to a decrease in output, employment, and real interest rates. The price level may also fall due to lower demand.

© An increase in corporate tax rate will shift the cost structure for firms, leading to decreased profitability and reduced investment spending. This results in a leftward shift of the IS curve, leading to a reduction in output, employment, and real interest rates. The real wage may also decrease as firms reduce labor costs. The price level may or may not change depending on how much demand decreases.

(d) A reduction in transaction costs via an online platform would make it easier for investors to buy and sell stocks. This leads to an increase in investment spending, shifting the IS curve rightward. This results in an increase of output, employment, and real wages with a higher real interest rate compared with before. Consumption is likely to rise since households feel wealthier from their increased portfolio values. The price level would go up as there is more money circulating within this market creating more demand overall.

Note that these effects are general tendencies; actual outcomes depend on various factors such as initial conditions and policy responses by governments or central banks.

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