3. We study the effects of changes in labor productivity on the labor market in the long run in the context of the Mortensen-Pissarides model. For simplicity, unemployment benefits are set to b=0. In the long run, wages and recruiting costs are proportional to labor productivity: w = By and kcy where b and c are two with y. positive real numbers. Equilibrium market tightness Does not vary; does not vary with y and the unemployment rate Increases; Does not vary with a. d. b. C. Increases; Decreases Decreases; Increases e. Does not vary; Increases
3. We study the effects of changes in labor productivity on the labor market in the long run in the context of the Mortensen-Pissarides model. For simplicity, unemployment benefits are set to b=0. In the long run, wages and recruiting costs are proportional to labor productivity: w = By and kcy where b and c are two with y. positive real numbers. Equilibrium market tightness Does not vary; does not vary with y and the unemployment rate Increases; Does not vary with a. d. b. C. Increases; Decreases Decreases; Increases e. Does not vary; Increases
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
I need help of these questions with detail explanation
Transcribed Image Text:3. We study the effects of changes in labor productivity on the labor market in the long run in the context of the
Mortensen-Pissarides model. For simplicity, unemployment benefits are set to b=0. In the long run, wages
and recruiting costs are proportional to labor productivity: w = ßy and k = cy where b and c are two
with y and the unemployment rate
Increases; Does not vary with
with y.
positive real numbers. Equilibrium market tightness
Does not vary; does not vary
d.
4.
a.
b.
C.
Increases; Decreases
a.
b.
C.
Decreases; Increases
Let u denote the unemployment rate, fthe job finding rate, and s the separation rate. The law of motion for the
unemployment rate is (where Au
=
Ut+1 ut is the change in the unemployment rate):
d.
Au = fu + s(1 – u).
e.
Au = su + f(1 - u).
Au = fus(1-u).
Au = su - f(1 - u).
Au = s(1 - u) - fu.
e.
-
Does not vary; Increases
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education