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insens350 [35]
3 years ago
12

Graphically illustrate (using the WS and PS relations) and explain the effects of an increase in the markup on the equilibrium r

eal wage, the natural rate of unemployment, the natural level of employment, and the natural level of output

Business
1 answer:
lana66690 [7]3 years ago
4 0

Answer:

When the markup increases, real wage decreases and because of the decrease or the now low real wage the demand for labor at a low cost decreases which leads to a increase in the natural rate of unemployment. In addition the natural rate of unemployment has an inverse relationship with the natural level of employment, therefore, the natural rate of employment will decrease. And the output level will decrease.

Explanation:

See attached picture:

The decrease in real wage is shown by the movement from W/P to W/P'.

The increase in the natural rate of unemployment is shown by the movement from Un to Un' and the new equilibrium is at B.  

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Pet World is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR c
Len [333]

Answer:

C) 2.57%

Explanation:

Pet World's net cash flows:

<u>Year  </u>                  <u>Cash flow</u>

0                           -$9,500  

1                             $2,000

2                            $2,025

3                            $2,050

4                            $2,075

5                            $2,100

In order to find the rate of return we can use an excel spreadsheet and the IRR function =IRR (values,[guess]) =IRR (-9500,2000,2025,2050,2075,2100)

=IRR = 2.57%

3 0
2 years ago
Martin wants to provide money in his will for an annual bequest to whichever of his living relatives is oldest. That bequest wil
8090 [49]

Answer:

$16,667

Explanation:

Given that

Cash flows = $1,000

Growth rate = 6%

Interest rate = 12%

So by considering the above information, the amount would be

Amount = Cash flows ÷ (Interest rate - growth rate)

= $1,000 ÷ (12% - 6%)

= $16,667

We simply applied the above formula so that the amount could come by considering the given information

3 0
3 years ago
Suppose the Japanese economy has been experiencing slow growth. As a result, the Prime Minister, who thinks John Maynard Keynes
snow_tiger [21]

Answer: The recessionary gap will be equal to 1 trillion yen divided by 2.5 or 0.4 trillion yen

Explanation:

From the question, we are informed that GDP gap of 1 trillion yen and the marginal propensity to consume (MPC) is 0.60. Also, to close the GDP gap, the prime minister has decided to increase government spending. This means that there will be a recessionary gap because the actual GDP will be less than the potential GDP.

Fir the economy to be brought to its potential GDP, the spending of the government will give a stimulus to the economy. Since MPC is 0.6, the multiplier will be:

= 1/1-MPC

= 1/1 - 0.6

= 1/0.4

= 2.5

The government spending will then increase in order to close the recessionary gap as:

∆Y = ∆G × Multiplier

100 = ∆G × 2.5

∆G = 100/2.5

∆G = 40

Therefore, the recessionary gap will be equal to 1 trillion yen divided by 2.5 or 0.4 trillion yen.

4 0
3 years ago
Accountants consider only explicit costs when measuring accounting profit. Accountants ignore implicit costs because
TiliK225 [7]

Answer:

are not egarded to their sector

Explanation:

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3 0
3 years ago
Robert is a technology officer in an Umerian firm and he manages the firm's operations at its facility in Elador. Robert is cons
Zolol [24]

Answer:

B) The high school graduation rate in Elador is higher than in neighboring countries.

Explanation:

The new technology that Robert wants to install at Elador is supposed to improve productivity and reduce labor but if the technology is installed, it may cause unemployment in Elador because of the high rate of high school graduates in Elador.

The high school graduates would have lesser chance of finding employment if the technology that improves productivity and reduces labor is installed. Because machine would replace tasks that humans could have done, there would be no need to employ human labor thereby increasing unemployment rates.

4 0
2 years ago
Read 2 more answers
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