Computing the natural rate of unemployment

Reference no: EM131774110

Question: Suppose that for given labor-market conditions, worker bargaining power throughout the economy increases.

1. Using the 3-point curved line drawing tool, show the effect on the real wage and the natural rate of unemployment. Properly label your curve.

2. Using the point drawing tool, indicate the new equilibrium point and label it 'B'.

Carefully follow the instructions above, and only draw the required objects. In equilibrium, the effect of an increase in worker bargaining power is

(1) ________ in the natural rate of unemployment and

(2) ______ in the real wage. no change an increase a decrease no change a decrease an increase

Reference no: EM131774110

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