Question: Question 1: (5 points) Does the US have an active or a sclerotic (i.e. stagnant) labor market? Explain. Question 2: (5 points) Explain why labor

Question 1: (5 points) Does the US have an active or a sclerotic (i.e. stagnant) labor market? Explain. Question 2: (5 points) Explain why labor market conditions aect wages, by appealing to eiciency wage theories. Question 3: (5 points) The wage determination equation is given by, W=FFmd Explain why the expected price level, P3, is used in the above equation, instead of the actual price level, P. Question 4: (5 points) Using the wagesetting and pricesetting relations, prove that the natural rate of unemployment is given by, 1 F(u,,,z) = Hm

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