Question: This question is related to Intermediate macroeconomic, could you please answer it, I do not know how to solve it correctly, and provide step-by-step solution?
This question is related to Intermediate macroeconomic, could you please answer it, I do not know how to solve it correctly, and provide step-by-step solution? If you solve it in detail, I would be very grateful! Thank you very much.
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Q.1 Consider the DMP model. Low unemployment is a commonly pursued goal of governments. A subsidy, s, given to rms to encourage more hiring is a policy option that can be implemented with the intended goal of increasing employment and reducing the unemployment rate. (17 marks) a) What is the rm's surplus, consumer/worker surplus and total surplus with the introduction of a subsidy? (3 marks) b) Using Nash Bargaining what is the real wage solution? (2 marks) 0) Determine the equation that determines the supply side of the market V(Q) and the demand side of the market, em(1/j,1). (4 marks) (1) Solve for equilibrium and show it graphically. (4 marks)
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