DRAW A GRAPH. WITHOUT GRAPH THUMBS DOWN! Suppose the markup of goods prices over marginal cost is 2% and the wage-setting equation is W=P(1-u) with u being the unemployment rate. 1. What is the Natural level on Unemployment? 2. What is the real wage as determined by the price setting equation? 3. If the markup increases to 2.5% due to an increase in the price of Oil what happens to the natural rate of employment? Explain briefly and graphically this change.
DRAW A GRAPH. WITHOUT GRAPH THUMBS DOWN! Suppose the markup of goods prices over marginal cost is 2% and the wage-setting equation is W=P(1-u) with u being the unemployment rate. 1. What is the Natural level on Unemployment? 2. What is the real wage as determined by the price setting equation? 3. If the markup increases to 2.5% due to an increase in the price of Oil what happens to the natural rate of employment? Explain briefly and graphically this change.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter21: Unemployment
Section: Chapter Questions
Problem 41CTQ: Unemployment rates have been higher in many European countries in recent decades than in the United...
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DRAW A GRAPH. WITHOUT GRAPH THUMBS DOWN!
Suppose the markup of goods prices over marginal cost is 2% and the wage-setting equation is W=P(1-u) with u being the
1. What is the Natural level on Unemployment?
2. What is the real wage as determined by the
3. If the markup increases to 2.5% due to an increase in the price of Oil what happens to the natural rate of employment? Explain briefly and graphically this change.
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