Question 15 1 pt For this problem think about wage-setting and price-setting, in

Question

Question 15 1 pt For this problem think about wage-setting and price-setting, incorporating expectations about productivity (as in Chapter 13). Suppose an economy experiences technological change at rate gA, depreciation at rate ?, and population growth at rate gN. Furthermore, the economy saves at a constant rate (s). If the economy is in steady state, and the unemployment rate is at the natural level (un), we would expect O The natural unemployment rate to remain at the same level if nothing else changes in the economy The natural unem O The natural unem O None of the options listed

Explanation / Answer

The natural rate of unemployment rate to remain the same over time if nothing else change in the economy.

Because steady state depend on techonogy change, saving rate, depricidepre rate and finnaly population rate.

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