2 Suppose that the US does not allow international capital flows and migration Let the US production function be the following: Y = F(K,L) = AK 03L 07 a Explain effects of an increase in capital stock...

2 Suppose that the US does not allow international capital flows and migration Let the US production function be the following: Y = F(K,L) = AK 03L 07 a Explain effects of an increase in capital stock on the marginal product of capital and the marginal of labor b Suppose a large amount of foreign capital flows to the US Is this policy a demand shock or a supply? c Explain effects of the policy in Part (b) on the US capital market d Explain effects of the policy in Part (b) on the US labor market e Display diagrams to support your explanation in Parts (c) and (d)