DRAW A GRAPH. WITHOUT GRAPH THUMBS DOWN! Suppose the markup of goods prices over marginal cost is 2% and the wage-setti

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answerhappygod
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DRAW A GRAPH. WITHOUT GRAPH THUMBS DOWN! Suppose the markup of goods prices over marginal cost is 2% and the wage-setti

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