II. The existence of unemployment a. Suppose the unemployment rate is very low. How does the low unemployment rate change the relative bargaining power of workers and firms? What do your answers imply about what happens to the wage as the unemployment rate gets very low? b. Given your answer to part (a), why is there unemployment in the economy? (Hint: What would happen to real wages if the unemployment rate were equal to zero?)

II. The existence of unemployment a. Suppose the unemployment rate is very low. How does the low unemployment rate change the relative bargaining power of workers and firms? What do your answers imply about what happens to the wage as the unemployment rate gets very low? b. Given your answer to part (a), why is there unemployment in the economy? (Hint: What would happen to real wages if the unemployment rate were equal to zero?)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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part 2
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