Homework Answers
In a competitive system , firm will begin to increase prices and this will start a process of inflation.
( Reason--- so long as wage setting curve is below the price serting curve, firms can not raise prices as workers have less bargaining power but after the wage setting curve getting higher the price setting curve, the firms can increase prices because workers now can afford and capable to bargain more, this increase in prices will finally lead to inflation.)
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In the figure below, when employment is at the level at point C, the wage-setting curve...
can someone explain please Question 5 0/2 pts Which of the following is most likely to...
can someone explain please
Question 5 0/2 pts Which of the following is most likely to cause an increase in the inflation rate? a reduction in the percentage of workers who are in labor unions an increase in competition between firms an increase in the non-labor costs of production an increase in the unemployment rate Rising unemployment tends to put downward pressure on wages and prices. In the figure below, when employment is at the level at point C, the...
Problem 7 Wage setting curve 25-Bargaising gao Price seting curve Employment, N Phillips curves Inaion ()...
Problem 7 Wage setting curve 25-Bargaising gao Price seting curve Employment, N Phillips curves Inaion () bargaining pap ) Inarion () bargaining pap ) epected infation (31 expected infation (5%) U-3% Employment, N mployment at labour market equilibrium no bargaining gap (u-6%) Figure 2: Figure showing how expectations can shift the Phillips curve Copy Figure 2, making sure you leave plenty of space to the left of the 6% unemployment marker. Assume that from an initial position at A, there...
Which of the following statements about the wage-setting curve is correct? (Justify the answer) a) The...
Which of the following statements about the wage-setting curve is correct? (Justify the answer) a) The wage-setting curve depicts the workers' reservation wage for different levels of economy-wide employment b) At each point (U,w) on the wage-setting curve, the workers are choosing their best response effort level given the real wage w and unemployment rate U. c) A lower unemployment rate shifts down the wage-setting curve d) An exodus of European workers as a result of the Brexit would result...
The imposition of a minimum wage on a competitive labor market will likely create additional employment...
The imposition of a minimum wage on a competitive labor market will likely create additional employment opportunities because some low-skilled workers will now see their wage increase. O increase unemployment of high-skilled workers as firms substitute high-skilled labor for low-skilled labor. create unemployment as some people enter the labor market while some firms reduce the quantity of labor they are willing to employ due to the increased wage. O lower the wages of workers earning more than the minimum wage.
the labour market model a. Take a look at figure 9.12, the labour market model. Describe...
the labour market model
a. Take a look at figure 9.12, the labour market model. Describe
position B. Explain why B is not a Nash equilibrium. What would
happen?
b.
In a. you’ll describe an adaptation process. However, that might
not take place. For what reasons?
Labour supply Average product of labour Real wage Price-setting curve Equilibrium unemployment Demand-deficient or cyclical unemployment, at B Wage-setting curve Total involuntary unemployment, at B Employment, N The Nash equilibrium At point B, total...
Discuss the following statements: a . The Phillips curve implies that when unemployment is high, inflation...
Discuss the following statements: a . The Phillips curve implies that when unemployment is high, inflation is low, and vice versa . Therefore, we may experience either high inflation or high unemployment, but we will never experience both together. b. As long as we do not mind having high inflation, we can achieve as low a level of unemployment as we want. All we have to do is increase the demand for goods and services by using, for example, expansionary...
9. The short-run Phillips curve shows: an inverse relationship between unemployment and inflation. consequences of the...
9. The short-run Phillips curve shows: an inverse relationship between unemployment and inflation. consequences of the misperceptions theory. a direct relationship between unemployment and inflation. the optimal level of employment. 10. When workers and firms become aware of a rise in the general price level: they will not do anything, because they know they are powerless to counter any economic changes. they will agree to renegotiate wage contracts downward. firms with sticky prices will ultimately adjust their prices downward. they...
D Question 10 1.5 pts What is not true about involuntary unemployment? It is also known...
D Question 10 1.5 pts What is not true about involuntary unemployment? It is also known as excess supply in the labor market Some workers are coerced to work Some unemployment is necessary, which means the employer can motivate workers to provide effort on the job. the wage-setting curve is always to the left of the labor supply curve Question 9 Profit-maximizing condition for the firm occurs when marginal rate of substitution equals marginal rate of transformation There is no...
Suppose that workers and firms perfectly forecast inflation, so that the real wage remains unchanged as...
Suppose that workers and firms perfectly forecast inflation, so that the real wage remains unchanged as the price level rises over time. Prices and wages rise at the same rate, which implies that the real wage stays constant. The following graph shows the aggregate demand curve (AD) in an economy in long-run equilibrium. Assume the natural rate of unemployment is 6%, and potential output is $50 trillion. Use the orange points (square symbol) to draw the aggregate supply curve in...
The figure below illustrates the aggregate demand model. Now let's suppose that point A the economy...
The figure below illustrates the aggregate demand model. Now let's suppose that point A the economy is at full employment and prices are stable (no inflation). AD (high) AD (normal) AD (low) Aggregate demand, AD normal recession boom 45 8.5 Output, Y What type of bargaining gap exists at point A? Zero bargaining gap A neutral bargaining gap Both a positive and negative bargaining gap Positive bargaining gap 0 Negative bargaining gap
can someone explain please
Question 5 0/2 pts Which of the following is most likely to cause an increase in the inflation rate? a reduction in the percentage of workers who are in labor unions an increase in competition between firms an increase in the non-labor costs of production an increase in the unemployment rate Rising unemployment tends to put downward pressure on wages and prices. In the figure below, when employment is at the level at point C, the...
Problem 7 Wage setting curve 25-Bargaising gao Price seting curve Employment, N Phillips curves Inaion () bargaining pap ) Inarion () bargaining pap ) epected infation (31 expected infation (5%) U-3% Employment, N mployment at labour market equilibrium no bargaining gap (u-6%) Figure 2: Figure showing how expectations can shift the Phillips curve Copy Figure 2, making sure you leave plenty of space to the left of the 6% unemployment marker. Assume that from an initial position at A, there...
The imposition of a minimum wage on a competitive labor market will likely create additional employment opportunities because some low-skilled workers will now see their wage increase. O increase unemployment of high-skilled workers as firms substitute high-skilled labor for low-skilled labor. create unemployment as some people enter the labor market while some firms reduce the quantity of labor they are willing to employ due to the increased wage. O lower the wages of workers earning more than the minimum wage.
the labour market model
a. Take a look at figure 9.12, the labour market model. Describe
position B. Explain why B is not a Nash equilibrium. What would
happen?
b.
In a. you’ll describe an adaptation process. However, that might
not take place. For what reasons?
Labour supply Average product of labour Real wage Price-setting curve Equilibrium unemployment Demand-deficient or cyclical unemployment, at B Wage-setting curve Total involuntary unemployment, at B Employment, N The Nash equilibrium At point B, total...
9. The short-run Phillips curve shows: an inverse relationship between unemployment and inflation. consequences of the misperceptions theory. a direct relationship between unemployment and inflation. the optimal level of employment. 10. When workers and firms become aware of a rise in the general price level: they will not do anything, because they know they are powerless to counter any economic changes. they will agree to renegotiate wage contracts downward. firms with sticky prices will ultimately adjust their prices downward. they...
D Question 10 1.5 pts What is not true about involuntary unemployment? It is also known as excess supply in the labor market Some workers are coerced to work Some unemployment is necessary, which means the employer can motivate workers to provide effort on the job. the wage-setting curve is always to the left of the labor supply curve Question 9 Profit-maximizing condition for the firm occurs when marginal rate of substitution equals marginal rate of transformation There is no...
Suppose that workers and firms perfectly forecast inflation, so that the real wage remains unchanged as the price level rises over time. Prices and wages rise at the same rate, which implies that the real wage stays constant. The following graph shows the aggregate demand curve (AD) in an economy in long-run equilibrium. Assume the natural rate of unemployment is 6%, and potential output is $50 trillion. Use the orange points (square symbol) to draw the aggregate supply curve in...
The figure below illustrates the aggregate demand model. Now let's suppose that point A the economy is at full employment and prices are stable (no inflation). AD (high) AD (normal) AD (low) Aggregate demand, AD normal recession boom 45 8.5 Output, Y What type of bargaining gap exists at point A? Zero bargaining gap A neutral bargaining gap Both a positive and negative bargaining gap Positive bargaining gap 0 Negative bargaining gap
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