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evablogger [386]
3 years ago
14

Use the WS and PS relations to examine the effects of the following events on the natural rate of unemployment and on the real w

age. Be sure to explain the effects of the event on the WS and PS relations. Do not post problem sets on other places.
a. A new U.S. trade policy with a hope to protect American workers decreases international trade and makes product markets less competitive in the U.S.
b. A new law that bans the formation of labor unions has been passed.
Business
1 answer:
MrRa [10]3 years ago
6 0

Answer:

Attached below is the WP and WS graph

A) since the new U.S trade policy decreases international trade and makes product markets less competitive in the U.S . hence this affects the PS equation and PS curve.   PS curve ( W/P ) = 1 ( 1 + u ) . here U > 0 due to the decrease in market competition. hence the PS curve will shift downward from PS to PS’ and the equilibrium points will shift from A to A’. while the real wage will be lower i.e. from r to r’  and the natural rate of unemployment will be higher i.e. from Un to Un'   ( image 1 )

B) When the new law that bans the formation of labor unions has been passed the power of the union  weakens and this will affect  wage setting (WS) curve.  Hence The WS curve will shift leftward from WS to WS’ also, the equilibrium point will change from B to B’. Since the PS curve is horizontal, at this new level of equilibrium, the real wages will remain unchanged, while the natural rate of unemployment will be reduced from Un to Un’.

Explanation:

A) since the new U.S trade policy decreases international trade and makes product markets less competitive in the U.S . hence this affects the PS equation and PS curve.   PS curve ( W/P ) = 1 ( 1 + u ) . here U > 0 due to the decrease in market competition. hence the PS curve will shift downward from PS to PS’ and the equilibrium points will shift from A to A’. while the real wage will be lower i.e. from r to r’  and the natural rate of unemployment will be higher i.e. from Un to Un'   ( image 1 )

B) When the new law that bans the formation of labor unions has been passed the power of the union  weakens and this will affect  wage setting (WS) curve.  Hence The WS curve will shift leftward from WS to WS’ also, the equilibrium point will change from B to B’. Since the PS curve is horizontal, at this new level of equilibrium, the real wages will remain unchanged, while the natural rate of unemployment will be reduced from Un to Un’.

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Many advertising organizations say that applying the term "unfair" to an advertisement is
Vadim26 [7]

Answer:

<em>Necessary to protect consumers from harmful products</em>

8 0
2 years ago
Consider the following data to answer the following questions: Country GDP Population A $32,000 1,500 B $20,000 1,000 C $10,000
polet [3.4K]

Answer: 4 times

Explanation:

GDP per capita is a way of measuring the wealth Distribution in a country. It is calculated by dividing the Gross Domestic Product by the population of the country. The aim usually is to see if the Country's economy is big enough considering the amount of people it has.

Country C has a GDP per capita of,

= 10,000/500

= $20

Country D has a GDP per capita of,

= 10,000/2,000

= $5

= 20/5

= 4

Country C has a GDP per capita that is 4 times that of C.

4 0
3 years ago
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6 0
3 years ago
A company enters into a short futures contract to sell 5000 bushels of wheat for 571'4 cents per bushel. The initial margin is $
zalisa [80]

Answer:

563.4 cents

Explanation:

A margin call occurs when the margin of an investment falls bellow the maintenance margin.

In this problem, the production costs for 5,000 bushels are given by:

Margin = Price*units -Cost\\\$1,500=\$5.714*5000 - Cost\\Cost = \$27,070

The price per bushel that yields a margin of $1,100 is:

\$1,100=Price*5,000- \$27,070\\Price =\$5.634=563.4\ cents

You will receive a margin call at a price of 563.4 cents per bushel.

4 0
3 years ago
A portfolio consists of $13,400 in Stock M and $18,900 invested in Stock N. The expected return on these stocks is 8.50 percent
Aneli [31]

Answer:

The expected return on the portfolio is:

10.31% ($3,331.40)

Explanation:

a) Data and Calculations:

Portfolio investments:  Expected Returns %   Expected Returns $

Stock M = $13,400           8.50%                           $1,139

Stock N = $18,900          11.60%                           $2,192.40

Total        $32,300          10.31%                           $3,331.40

Total expected returns in percentage is Expected Returns $/Total Investments * 100

= $3,331.40/$32,300 * 100

= 10.31%

b) The expected returns on the portfolio is derived by calculating the expected returns for each investment and summing up.  Then dividing the expected portfolio returns by the portfolio investment.  This yields 10.31% percentage value.

3 0
3 years ago
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