Show that, in the Keynesian DMP model, if the wage is judged to be inefficiently high, so

Question:

Show that, in the Keynesian DMP model, if the wage is judged to be inefficiently high, so that unemployment is inefficiently high, the government can pay a subsidy to firms that corrects the problem. Explain your results. Does it matter whether the government subsidizes firms that post vacancies or only successful matches? Discuss.
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Macroeconomics

ISBN: 978-0132991339

5th edition

Authors: Stephen d. Williamson

Question Posted: