Assume the labour market is in equilibrium initially. How would each of the following shock affect the equilibrium real wage? Explain briefly in both words and graphs. a. An increase in expected future real wage. b. A large number of immigrants enter the country.

Assume the labour market is in equilibrium initially. How would each of the following shock affect the equilibrium real wage? Explain briefly in both words and graphs. a. An increase in expected future real wage. b. A large number of immigrants enter the country.

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter11: Fiscal Policy: The Keynesian View And Historical Development Of Macroeconomics

Section: Chapter Questions

Problem 1CQ

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Question

Assume the labour market is in equilibrium initially. How would each of the following shock
affect the equilibrium real wage? Explain briefly in both words and graphs.
a. An increase in expected future real wage.
b. A large number of immigrants enter the country.

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