2. Consider the following news excerpts: "The Harper government is scaling back plans to raise Employment Insurance premiums on Jan. 1, 2012, responding to public concern that Ottawa needs to change course in the face of rising unemployment. Under a plan announced last fall by Finance Minister Jim Flaherty, payroll premiums for E.I. were set to rise by 10 cents per $100 of insurable earnings for employees and 14 cents for employers. ( The Globe and Mail Update, Nov 2011)." At the same time, "Quebec's hourly minimum wage will climb 25 cents, to $9.90, in May - but for workers who receive tips, it's rising by 20 cents, to $8.55. (The Montreal Gazette, Dec 2011)" (a) Determine the effects of a decrease in El on the reservation wage and on the long run unemployment rate, in the search model of unemployment and explain your results. ( b) what are the effects of an increase in the minimum nominal wage in the labour market? Is this government policy consistent with your conclusions from point (a) regarding the change in the reservation wage? Explain. ( c) What are the effects of an increase in the minimum nominal wage in the labour market? Explain how this policy leads to segmentation in the labour market. Is this government policy consistent with your conclusions from point (a) regarding the change in the reservation wage? Explain