Discuss, using diagrams, how an increased minimum wage influences the wage and price setting (WS/PS) model. How are unemployment and output equilibrium levels affected
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Discuss, using diagrams, how an increased minimum wage influences the wage and
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- Assume that you were working in a bar before the Covid-19 pandemic. Suppose that you lost your job as soon as the COVID–19 pandemic hit the economy. Given that many non-essential industries have shut down following the government order, what is your likely behavior in the labor market? How reliable is the unemployment rate during the pandemic in assessing the labor market tightness? Explain.pleasee quickk !!!!! The main difference between market-clearing and non-market-clearing models of the economy is the... a. Long-run path of employment. b. Tendency for output to return to potential in the long run. c. Long-run path of wages. d. Long-run path of output. e. Degree of wage and price flexibility in the short runDo you think it is rational for workers to prefer sticky wages to wage cuts, when the consequence of sticky wages is unemployment for some workers? Why or why not? How do the reasons for sticky wages explained in this section apply to your argument?
- Explain in detail what will happen to the natural rate of unemployment and the real wage when firms decide to increase their markups.Consider an economy (call it country G) that is implementing climate change legislation more rapidly than other countries (refer to them as ‘row’ for ‘rest of the world’). Explain how this decision by country G could affect its long-run markup. Using diagrams, explain your forecast for the effect of this decision on real wages, inequality and employment in G in the new equilibrium. In the light of your findings, what advice would you give to a policy maker in G?The Federal Reserve Bank of Atlanta releases its monthly Wage Growth Tracker to study trends in wages across various industries. One interesting issue is whether wages rise faster for those who stay in their current jobs (job stayers) or those who seek new opportunities (job switchers). According to the data, job stayers tend to do better than job switchers during a recession. But when the labor market is strong, job switchers experience higher wage growth than job stayers. a. During a recession, job stayers do better than job switchers because a.labor demand increases and job switchers can find jobs with higher wages. b.labor supply decreases and job switchers can find jobs with higher wages. c.labor demand decreases and job switchers cannot find jobs with higher wages. b. When the labor market is strong, job switchers experience higher wages than job stayers because a.labor demand decreases and job switchers cannot find jobs with higher wages. b.labor supply…
- Explain in words why the decisions of firms about what price to set has implications for the real wage in the economy.Discuss the view of neoclassical theory of minimum wage legislation on employment.During the global pandemic, the data show an unprecedented surge in initial claims. Initial claims are a good proxy for separating employment matches. Use the twosided search model to argue for a set of policy interventions that (a) subsidise the search costs faced by firms and (b) aim to raise the efficiency of the matching process. Which one of these would be more effective in stimulating employment and output?
- Compare the classical and Keynesian views on the speed of wage and priceadjustment. What are the important consequences of the differences in theirviews?During the global pandemic, the data show an unprecedented surge in initial claims.Initial claims are a good proxy for separating employment matches. Use the two-sided search model to argue for a set of policy interventions that (a) subsidise the search costs faced by firms and (b) aim to raise the efficiency of the matching process. Which one of these would be more effective in stimulating employmentand output?Discuss Keynesian view of minimum wage legislation on employment.
