Assume an economy has a population of working age of 83 million and unemployment rate is 4%. Further, the average productivity of labour is 80,000 and the average mark-up in the economy (u) is 5%. The wage-setting curve for this economy is given by real wage = 55,000 + 25, 000X, with X representing the employment rate. The labour market is in equilibrium. (а) Calculate the equilibrium real wage of the economy. (b) Calculate the employment rate of the economy. (c) Calculate the number of employed workers in the economy.

Assume an economy has a population of working age of 83 million and unemployment rate is 4%. Further, the average productivity of labour is 80,000 and the average mark-up in the economy (u) is 5%. The wage-setting curve for this economy is given by real wage = 55,000 + 25, 000X, with X representing the employment rate. The labour market is in equilibrium. (а) Calculate the equilibrium real wage of the economy. (b) Calculate the employment rate of the economy. (c) Calculate the number of employed workers in the economy.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter6: How Statisticians Measure Inflation

Section: Chapter Questions

Problem 6TY

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