Which of the followings justifies the slope of the Wage Curve?
i) Higher average unemployment rate means job-seekers are less aggressive in wage bargaining.
ii) Firms less willing to offer vacancies when wages are high.
iii) The media posts upbeat economic news when the economy has been doing well in the past several years, leading to employers having to give higher wages to retain workers.
iv) The shutting down of a major union, leading to a weaker wage bargaining position of workers.
A2: Which of the followings is inconsistent with the Kaldor's Stylized Facts of Economic Growth?
i) Wage growth goes up and down as the economy experiences booms and recessions
ii) Nominal wage of a country has been chronically falling for a country that experiences economic disaster with declining price level at the same time.
iii) Country A's GDP per capita has been growing much faster than that of Country B, due to Country A's higher Research and Development spending.
iv) Only (i) and (iii).
A3: Recent US policies include:
1) Cut down on immigration,
2) Encouraging companies to relocate back in the US, and
3) Denounce those who are not working but receiving long term benefits.
These policies will:
a) Shift the Beveridge curve to the left
b) Shift the Beveridge curve to the right 3
c) Reduce steady state GDP per capita growth according to the Romer's 2 sectors model (advanced economic growth model)
d) Increase steady state GDP per capita growth according to the Solow Growth Model.
A4: The government of Westland has decided to ban the internet and limit information flow of the country. Under the Lucas Two-Sectors model, such policy will, in the long run: a) Reduce capital per capita b) Reduce growth of technology c) Reduce output of the nation d) None of the above
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