"Consider the labor market in year 2021 but now assume that wages are totally rigid and cannot adjust during 2021. In this year business owners predict low sales for the years to come. As a result, they reduce labor demand. Draw the new equilibrium in a diagram and label it as point C. Use the following equations to find the new equilibrium: LD-70.000 w. LS-b+2w where b-10,000. What is the unemployment rate? Keep in mind that wages are totally rigid and use the diagram to help you understand what is going on. 43 percent 22 percent 20 percent None of the other options
"Consider the labor market in year 2021 but now assume that wages are totally rigid and cannot adjust during 2021. In this year business owners predict low sales for the years to come. As a result, they reduce labor demand. Draw the new equilibrium in a diagram and label it as point C. Use the following equations to find the new equilibrium: LD-70.000 w. LS-b+2w where b-10,000. What is the unemployment rate? Keep in mind that wages are totally rigid and use the diagram to help you understand what is going on. 43 percent 22 percent 20 percent None of the other options
Chapter12: The Partial Equilibrium Competitive Model
Section: Chapter Questions
Problem 12.12P
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