Macroeconomics Models

Summary : This is a 3 page on macro Economics Models . The further answers the 5 questions of Macro Economic ModelsRunning contribute : MACRO ECONOMICS MODELSMacro Economics Models[The flesh of Writer Appears here][The Name of Institution Appears here][The Name of Professor Appears here][Course Appears Here]Macro Economic ModelsQ1 ) Labor merc lapseise Affect on Worker s Bargaining PowerThe affect of fag market is depending on market s conditions . If apprehend supplement is in bare , and on that point are many highly pendent and skilled doers are in the market , who are quiesce unemployed or in other words , the crop of unemployment is high , the affect of confinement market on worker s bargain power is too high and workers don t energise any choice but to work on disgrace wage tempo . While on other take place , if there is deficit of skilled workers and unemployment respect is very wretched , workers are in stronger bargaining position to demand higher(prenominal) wage rate . In these conditions , labor market affects the bargaining power of workersQ2 ) Efficiency wage Higher wage that employer awarded to employees to pass on higher outputs , and to increase worker efficiency and to increase the productivity of workers is known as Efficiency WageEfficiency wage is a labor economics hypothesis that assumes that compensation or honorarium for labor are determined by a number of other factors in addition to supply and demand . These factors might allow a company s desire to hire highly plentiful labor , reduce disturbance and secure their investments on HR developments . Market clearing wages , on the other hand , are determined solely on the basis of supply and demand its based on the new classical naturalize hypothesis of supply and demand which assumes markets always move to a determine where supply and demand are always peer , which in this case is labor cost .

In simpler harm , if there is a shortage or a surplus in a market for a good or service (labor in this case , market will curtly be cleared of any such surplus or shortage through a shift in price , upwards or downwards depending on whether it s a shortage or a surplusQ3 ) Natural Rate of Unemployment The natural rate of unemployment is the unemployment rate such that the real wage chosen in wage setting is equal to the real wage implied by price setting . The rate of unemployment arising from all sources except fluctuations in aggregate demand . Those sources include frictional unemployment , which is associated with normal turnover of jobs structural unemployment , which includes unemployment caused by mismatches between the skills of available workers and the skills necessary to receive vacant positions and unemployment caused by such institutional factors as effectual minimum wages , the presence of unions social conventions , or employer wage-setting practices mean to increase workers morale and effort . An increase in unemployment rate decreases wages . The higher unemployment weakens worker s bargaining power , and there is no chance for workers except to accept lower wages higher unemployment allows firm to pay...If you want to get a fully essay, order it on our website: Orderessay

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