DRAW A GRAPH. WITHOUT GRAPH THUMBS DOWN! Suppose the markup of goods prices over marginal cost is 2% and the wage-setti
Posted: Fri Jul 01, 2022 7:52 am
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.