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{2-1 Consider the MP model. low unemployment is a commonly pursued goal of governments. A subsidy, 5, given to rms to encourage more hiring is

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{2-1 Consider the \"MP model. low unemployment is a commonly pursued goal of governments. A subsidy, 5, given to rms to encourage more hiring is a policy option that can be implemented 1with the intended goal of increasing employnlent and reducing the unemployment rate. {16 marks) e) What is the impact of the subsidy (s) on labour supply (Q) and labour market tightness ()), the real wage (w) and the unemployment rate (u)? (4 marks)

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