Explain what effect an increase in the unemployment rate will have on the real wage based on: (1 ) the WS relation; and (2 ) the PS relation
What will be an ideal response?
An increase in the unemployment rate will decrease bargaining power, decrease the nominal wage, and therefore decrease the real wage based on wage setting behavior. Changes in the unemployment rate have no effect on the real wage based on price setting behavior.
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One of the key reasons why monopolies exist is:
A. there is easy entry and exit into and out of the market. B. the goods sold are highly inaccessible to buyers. C. there are barriers to entry into the market. D. geographical differences.
The buying and selling of government bonds by the FOMC constitutes:
a. an open market operation. b. a federal funds adjustment. c. a discount rate adjustment. d. a change in the reserve requirement. e. sterilization of the money supply
Based on the graph showing equilibrium output and price for a monopolist, the profit loss from producing too much is located ______.
a. below the marginal revenue curve
b. below the marginal cost curve
c. above the demand curve
d. to the right of the demand curve
The domestic demand and supply for sugar are Qd = 40,000 ? 200P and QSD = 10,000 + 300P. The foreign supply is QSF = 20,000 + 100P. What is the total supply of sugar in the domestic market?
A. Q = 15,000 + 200P B. Q = 10,000 + 300P C. Q = 50,000 + 100P D. Q = 30,000 + 400P