Question 1

Based on your understanding of the labor market model presented by Blanchard (i.e.,the WS and PS relations),explain what types of policies could be implemented to cause a reduction in the natural rate of unemployment.

Accepted Answer

The answer of Based on your understanding of the labor...

Question 2

Explain what effect a reduction in the unemployment rate will have on the real wage based on: (1)the WS relation; and (2)the PS relation.

Accepted Answer

The answer of Explain what effect a reduction in the...

Question 3

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.

Accepted Answer

The answer of Explain what effect an increase in the...

Question 4

Based on wage setting behavior,we know that an increase in the unemployment rate will cause

Accepted Answer

When the unemployment rate increases, there are more job seekers and fewer job openings, which gives employers greater bargaining power in wage negotiations. As a result, employers may offer lower wages, leading to a reduction in the real wage. Therefore, an increase in the unemployment rate typically results in a reduction in the real wage.

Question 5

Graphically illustrate (using the WS and PS relations)and explain the effects of an increase in the markup on the equilibrium real wage,the natural rate of unemployment,the natural level of employment,and the natural level of output.

Accepted Answer

The answer of Graphically illustrate (using the WS and PS...

Question 6

Based on price setting behavior,we know that an increase in the unemployment rate will cause

Accepted Answer

The answer of Based on price setting behavior,we know that...

Question 7

A reduction in the minimum wage will tend to cause which of the following?

Accepted Answer

A reduction in the minimum wage will lower the cost of hiring workers, which will increase the quantity of labor demanded by firms. This increase in labor demand will cause an upward movement along the labor demand curve, resulting in a downward shift in the WS (wage-supply) curve. This is because, at a lower wage rate, more workers are willing to work, and firms are willing to hire more workers. Therefore, reducing the minimum wage will not cause an upward shift in the PS (wage-demand) curve since there will be a surplus of workers, and the wages will decrease as a result of competition.

Question 8

Graphically illustrate (using the WS and PS relations)and explain the effects of an increase in the minimum wage on the equilibrium real wage,the natural rate of unemployment,the natural level of employment,and the natural level of output.

Accepted Answer

The answer of Graphically illustrate (using the WS and PS...

Question 9

Graphically illustrate (using the WS and PS relations)and explain the effects of a reduction in the minimum wage on the equilibrium real wage,the natural rate of unemployment,the natural level of employment,and the natural level of output.

Accepted Answer

The answer of Graphically illustrate (using the WS and PS...

Question 10

First,explain what the PS relation represents.Second,explain why it has its particular shape.

Accepted Answer

The answer of First,explain what the PS relation represents.Second,explain why...

Question 11

An increase in unemployment benefits will tend to cause which of the following?

Accepted Answer

An increase in unemployment benefits will increase the disposable income of the unemployed workers, which will increase their demand for goods and services. The increase in demand will cause an upward shift in the WS (wage-setting) curve as firms will need to hire more workers to meet the increased demand. This, in turn, will lead to an increase in employment and a decrease in unemployment.

Question 12

Graphically illustrate (using the WS and PS relations)and explain the effects of a reduction in the markup on the equilibrium real wage,the natural rate of unemployment,the natural level of employment,and the natural level of output.

Accepted Answer

The answer of Graphically illustrate (using the WS and PS...

Question 13

Explain how a reduction in the unemployment rate will affect bargaining power and nominal wages.

Accepted Answer

The answer of Explain how a reduction in the unemployment...

Quiz 7: The Labor Market

Based on your understanding of the labor market model presented by Blanchard (i.e.,the WS and PS relations),explain what types of policies could be implemented to cause a reduction in the natural rate of unemployment.

Explain what effect a reduction in the unemployment rate will have on the real wage based on: (1)the WS relation; and (2)the PS relation.

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.

Based on wage setting behavior,we know that an increase in the unemployment rate will cause

Graphically illustrate (using the WS and PS relations)and explain the effects of an increase in the markup on the equilibrium real wage,the natural rate of unemployment,the natural level of employment,and the natural level of output.

Based on price setting behavior,we know that an increase in the unemployment rate will cause

A reduction in the minimum wage will tend to cause which of the following?

Graphically illustrate (using the WS and PS relations)and explain the effects of an increase in the minimum wage on the equilibrium real wage,the natural rate of unemployment,the natural level of employment,and the natural level of output.

Graphically illustrate (using the WS and PS relations)and explain the effects of a reduction in the minimum wage on the equilibrium real wage,the natural rate of unemployment,the natural level of employment,and the natural level of output.

First,explain what the PS relation represents.Second,explain why it has its particular shape.

An increase in unemployment benefits will tend to cause which of the following?

Graphically illustrate (using the WS and PS relations)and explain the effects of a reduction in the markup on the equilibrium real wage,the natural rate of unemployment,the natural level of employment,and the natural level of output.

Explain how a reduction in the unemployment rate will affect bargaining power and nominal wages.