5. Suppose an economy is characterized by the equations below: Price setting: P= (1+ m\W/A) Wage setting: W = A°P'(1– u) Write down an expression for the equilibrium unemployment rate if P = P but A does not necessarily equal A. Now suppose that expectations of both prices and productivity are accurate. If the markup (m) is equal to 5%, the natural rate of unemployment is

Suppose the world price of cotton falls substantially. The demand for labor among cotton-producing firms in Texas will The demand for labor among textile-producing firms in South Carolina, for which cotton is an input, will . The temporary unemployment resulting from such sectoral shifts in the economy is best described as unemployment. Suppose the government wants to reduce this type of unemployment. Which of the following policies would help achieve this goal? Check all that apply. O Improving a widely used job-search website so that it matches workers to job vacancies more effectively O Offering recipients of unemployment insurance benefits a cash bonus if they find a new job within a specified number of weeks O Increasing the benefits offered to unemployed workers through the government's unemployment insurance program

Label the following statement as true or false: A permanent, large increase in the price of oil reduces the natural rate of unemployment Select one: True False

10 DRAW A GRAPH. WITHOUT GRAPH THUMBS DOWN!Suppose the markup of goods prices over marginal cost is 2% and the wage-setting equation is W=P(1-u) with u being the unemployment rate.1. What is the Natural level on Unemployment?2. What is the real wage as determined by the price setting equation?3. If the markup increases to 2.5% due to an increase in the price of Oil what happens to the natural rate of employment? Explain briefly and graphically this change.

Month/Yr Sep/2020 Cyclical Rate of Unemployment (percent) 3.5 Suppose it is claimed that actual real GDP deviates from potential real GDP by 2% for every percentage point of cyclical unemployment. In other words, assume that actual real GDP falls below (or rises above) potential real GDP by 2% when the rate of unemployment rises above (or falls below) the natural rate of unemployment by 1%. Given the cyclical unemployment rate recorded above, this translates into actual real GDP deviating from potential real GDP by $ billion. (Enter your response rounded to one decimal place and use a minus sign if necessary. If actual GDP is below potential GDP, enter your answer as a negative value.)

Scenario 1. Assume that frictional unemployment is 25; structural unemployment is 50; cyclical unemployment is 150; discouraged workers = 75; employed workers = 750; underemployed workers = 200. Use this information to answer the following 5 questions.Refer to Scenario 1.  Is the economy at full employment?   Question 15 options:   a)  Yes, because the unemployment rate is below 10%   b)  No, because the unemployment rate exceeds the natural rate of unemployment   c)  No, because cyclical unemployment exists in the economy   d)  Answers B and C are both correct

The labour market in an economy is characterised by the following equations: Wage setting: Price setting: W p² W Р = 0.9-0.5u = 1 1+µ -A In which W is nominal wages, pe and P are expected nominal prices and nominal prices, respectively, u is level of unemployment. µ is the price mark-up and λ is the marginal product of labour. Assume μ = 0.3 and λ = 1.1 Considering this information, which of the following statements are CORRECT: Improvement in working conditions will have no effects in the equilibrium level of unemployment in this economy. If this economy's actual output is below its potential output, there is pressure for real wages to decrease below 0.85 (i.e., W<0.85). If price marginal product of labour decreases to 1, the equilibrium real wage in this economy will decrease. A positive demand shock will change the equilibrium variables in this economy.

The figure on the right shows the average monthly flows (in millions) between employment, unemployment, and non-participation for a hypothetical economy. According to the figure, the proportion of unemployed workers finding jobs in an average month is %. (Round your response to one decimal place.) U.S. data covering the 1996-2014 period show that the proportion of unemployed workers finding jobs has O A. an indeterminate relationship with the unemployment rate. OB. a strong inverse relationship with the unemployment rate. OC. a weak inverse relationship with the unemployment rate. OD. a strong positive relationship with the unemployment rate. Employment 165.8 million 1.9 4.7 2.6 1.7 5.3 Unemployment Out of the labor force 7.7 million 2.0 77.1 million G

Please adjust the graph to show the impact of a recession, where the theoretical market equilibrium wage rate falls to $10/h. Then, answer the two questions assuming wages are sticky downward. Wage rate (per hour) 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0 0 S 1 2/ D 6 7 8 9 10 11 12 13 14 15 2 3 4 5 Labor quantity (in millions of workers) increase or decrease in unemployment After the effects of the recession are felt, what is the size of the increase or decrease in unemployment? S = What is the actual wage rate that predominates in the market? million people

Consider a simple economy with search unemployment. The matching function is given by M = eQ^(1/2)A^(1/2) There were initially Q = 1000 unemployed workers looking for a job. Let b = 0.5, z = 1, k = 0.1, e = 3/5 and a = 0.5, where k is the cost of creating a vacancy. 1.Calculate the market tightness j. Show your calculation in details.2.What is the unemployment rate?3.What is the vacancy rate?4.How many vacancies are posted in the economy?