Chapter 6

Question 1

Proportion if workers who find jobs

Answer 1

f = s/ ((λ)u+ s)

Question 2

Turnover of workers of company (i)

Answer 2

Zi = Z(Wi/W)

Question 3

Desired Wage equation First Phillips curve

Answer 3

ΔWdt/Wt-1 = ΔWt/(Wt-1) - b(ut-un)

Change in desired wage over wage at t-1 =Change in wage/ wage at t-1 -b (propensity to change wage due to unemployment ) times the difference between unemployment at t and the natural level of unemployment

Question 4

Real wage

Answer 4

W/P = MPL / (1+μ)