macroeconomics. I just need the correct option.
Homework Answers
The correct option is 3.5%.
As we know that, The natural rate of unemployment represents the lowest unemployment rate whereby inflation is stable or the unemployment rate that exists with non-accelerating inflation.In order to calculate the natural rate, first add the number of frictionally unemployed (FU) to the number or people who are structurally unemployed (SU), then divide this number by the total labor force.
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macroeconomics. I just need the correct option.
Wage setting: W = Pº(1 – u) Price setting:...
Suppose that the markup of goods prices over marginal cost is 5%, and the wage-setting equation is W = P(1-u), where u is the unemployment rate. The real wage, as determined by the price-setting equation is _______. The natural rate of unemployment is ___
Suppose that the markup of goods prices over marginal cost is 5%, and the wage-setting equation isW = P(1-u)where u is the unemployment rate.The real wage, as determined by the price-setting equation is _______.The natural rate of unemployment is _______%.
Suppose that the markup of goods prices over marginal cost is 5%, and that the wage-setting...
Suppose that the markup of goods prices over marginal cost is 5%, and that the wage-setting equation is W = P(1 - u), where u is the unemployment rate. Suppose that the markup of prices over costs increases to 10%. The natural rate of unemployment is now 9.1 %. (Round your response to one decimal place.) Which of the following best explains why the increase in the markup causes the natural rate of unemployment to rise? O A. It shifts...
Question 2 (5 marks) The wage setting relation W PE(u, z) developed in lectures and in...
Question 2 (5 marks) The wage setting relation W PE(u, z) developed in lectures and in Blanchard, for the situation where P=P®, can be drawn in real wage/unemployment space as follows: W/P WS (Wage setting relation) u (a) (b) Explain why an increase in the unemployment rate would be associated with a lower real wage rate. Explain what effect an increase in the unemployment benefit rate would have on this wage setting relation. Explain the effect an increase in firms'...
Question 2 (5 marks) The wage setting relation W = PF(u, z) developed in lectures and...
Question 2 (5 marks) The wage setting relation W = PF(u, z) developed in lectures and in Blanchard, for the situation where P = Pe can be drawn in real wage/unemployment space as follows: W/P WS (Wage setting relation) u (a) (b) Explain why an increase in the unemployment rate would be associated with a lower real wage rate. Explain what effect an increase in the unemployment benefit rate would have on this wage setting relation Explain the effect an...
Question 2 (5 marks) The wage setting relation W = PF(u, z) developed in lectures and...
Question 2 (5 marks) The wage setting relation W = PF(u, z) developed in lectures and in Blanchard, for the situation where P=pe, can be drawn in real wage/unemployment space as follows:- W/P Į Į Į Į I Į I WS (Wage setting relation) ue (a) (b) Explain why an increase in the unemployment rate would be associated with a lower real wage rate. Explain what effect an increase in the unemployment benefit rate would have on this wage setting...
Question 1: (a) The Wage Setting Relation is given by: WS: W-1"F(u, z) Explain the effect of an increase in the unemployment rate, u, on nominal wage, W. Be sure to explain both intuitively using...
Question 1: (a) The Wage Setting Relation is given by: WS: W-1"F(u, z) Explain the effect of an increase in the unemployment rate, u, on nominal wage, W. Be sure to explain both intuitively using words and using the above equation. (b) The Price Setting Relation is given by: PS: P (1 m)W Explain the relationship between monopoly power and the markup, m. (c) Re-arrange PS and show that an increase in the markup leads to a decrease in the...
Please help with C and D. Thank You. 1. (4 points) Suppose that the markup of...
Please help with C and D. Thank
You.
1. (4 points) Suppose that the markup of goods over unit costs is 20% and that that the wage-setting equation is W = P(1 - u), where u is the unemployment rate. a. What is the real wage, as determined by the price-setting equation? b. What is the natural rate of unemployment? c. Suppose that the markup of prices over costs increases to 25%. What happens to the natural rate of unemployment?...
The natural rate of unemployment Suppose that the markup of the prices of products over wage...
The natural rate of unemployment Suppose that the markup of the prices of products over wage cost, z, is 10%, and that the wage-setting equation is W = P*(1 - 2m + z) where m is the unemployment rate and z is the unemployment benefit/minimum wage. a. What is the real wage, as determined by the price-setting equation? b. Solve for the natural rate of unemployment c. What happens to the natural rate of unemployment if z falls from 10%...
Question 3: (45 marks] Suppose the price-setting equation is given by P= (1 + m)W where...
Question 3: (45 marks] Suppose the price-setting equation is given by P= (1 + m)W where m is the markup. The wage-setting equation is given by W = pe? where z are unemployment benefts and u is the unemployment rate. 1. Derive the real wage and unemployment consistent with equilibrium in the labor market in the medium run. Is this the natural rate of unemployment? Does the equilibrium rate of unemployment change if unemployment benefts decrease? Explain? (8 marks] 2....
Suppose that the firms' markup over cost is 10% and that the wage determination equation when...
Suppose that the firms' markup over cost is 10% and that the wage determination equation when Pe=P is W = P(1-u) where u = unemployment rate (assume for simplicity, that the catch-all variable z does not enter wage setting). What is the natural rate of unemployment? (please answer in the form 0.xxxx (which 4 digital places), e.g. 0.1234 representing 12.34%)
Suppose that the markup of goods prices over marginal cost is 5%, and that the wage-setting equation is W = P(1 - u), where u is the unemployment rate. Suppose that the markup of prices over costs increases to 10%. The natural rate of unemployment is now 9.1 %. (Round your response to one decimal place.) Which of the following best explains why the increase in the markup causes the natural rate of unemployment to rise? O A. It shifts...
Question 2 (5 marks) The wage setting relation W PE(u, z) developed in lectures and in Blanchard, for the situation where P=P®, can be drawn in real wage/unemployment space as follows: W/P WS (Wage setting relation) u (a) (b) Explain why an increase in the unemployment rate would be associated with a lower real wage rate. Explain what effect an increase in the unemployment benefit rate would have on this wage setting relation. Explain the effect an increase in firms'...
Question 2 (5 marks) The wage setting relation W = PF(u, z) developed in lectures and in Blanchard, for the situation where P = Pe can be drawn in real wage/unemployment space as follows: W/P WS (Wage setting relation) u (a) (b) Explain why an increase in the unemployment rate would be associated with a lower real wage rate. Explain what effect an increase in the unemployment benefit rate would have on this wage setting relation Explain the effect an...
Question 2 (5 marks) The wage setting relation W = PF(u, z) developed in lectures and in Blanchard, for the situation where P=pe, can be drawn in real wage/unemployment space as follows:- W/P Į Į Į Į I Į I WS (Wage setting relation) ue (a) (b) Explain why an increase in the unemployment rate would be associated with a lower real wage rate. Explain what effect an increase in the unemployment benefit rate would have on this wage setting...
Question 1: (a) The Wage Setting Relation is given by: WS: W-1"F(u, z) Explain the effect of an increase in the unemployment rate, u, on nominal wage, W. Be sure to explain both intuitively using words and using the above equation. (b) The Price Setting Relation is given by: PS: P (1 m)W Explain the relationship between monopoly power and the markup, m. (c) Re-arrange PS and show that an increase in the markup leads to a decrease in the...
Please help with C and D. Thank
You.
1. (4 points) Suppose that the markup of goods over unit costs is 20% and that that the wage-setting equation is W = P(1 - u), where u is the unemployment rate. a. What is the real wage, as determined by the price-setting equation? b. What is the natural rate of unemployment? c. Suppose that the markup of prices over costs increases to 25%. What happens to the natural rate of unemployment?...
Question 3: (45 marks] Suppose the price-setting equation is given by P= (1 + m)W where m is the markup. The wage-setting equation is given by W = pe? where z are unemployment benefts and u is the unemployment rate. 1. Derive the real wage and unemployment consistent with equilibrium in the labor market in the medium run. Is this the natural rate of unemployment? Does the equilibrium rate of unemployment change if unemployment benefts decrease? Explain? (8 marks] 2....
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