Consider an economy in which all workers are covered by contracts that specify the nominal wage and give the employer the right to choose the amount of employment. The production function and formula for the marginal product of labor are provided. The ?IS, LM, and AD curves of the economy?(the goods market and asset market equilibrium?conditions) are described by the equations provided. The money supply M is 275

275 and the nominal wage is ?$10

10.

Given the equations at?right, the equation describing the AD curve?is:

Y?=

nothing

?+

nothing

?/P. ?(round each coefficient to one decimal place?)

What are the equilibrium values for the following?variables?

Price level ?(P?):

nothing

?(round to two decimal places?)

Output ?(Y?):

nothing

?(round to one decimal place?)

Employment ?(N?):

nothing

?(round to the nearest whole number?)

Real wage ?(w?):

nothing

?(round to two decimal places?)

Real interest rate ?(r?):

nothing

?(round to three decimal?places).

?Production?Function: Upper Y equals 20 times StartRoot Upper N EndRoot

Y=20

N

Marginal?Productivity: MPN equals StartFraction 10 Over StartRoot Upper N EndRoot EndFraction

MPN=10

N

IS?curve: Y?= 10000

10000minus

?6000

6000r

LM?curve: ?M/P?= 0.6

0.6Yminus

?5000

5000r

AS?curve: Y?=??2000

2000P

This Question: 1 pt 2 of 2 (0 complete) This Q Consider an economy in which all workers are covered by contracts that specify the nominal wage and give the employer the right to choose the Production Function: Y = 20 x N amount of employment. The production function and formula for the Marginal Productivity: MPN = 10 marginal product of labor are provided. The IS, LM, and AD curves of the VN economy (the goods market and asset market equilibrium conditions) are described by the equations provided. The money supply M is 275 and the IS curve: Y = 10000 -6000r nominal wage is $10. LM curve: M/P = 0.6Y -5000r Given the equations at right, the equation describing the AD curve is: Y= + \\/P. (round each coefficient to one decimal place) AS curve: Y = 2000P What are the equilibrium values for the following variables? Price level (P): (round to two decimal places) Output ()): (round to one decimal place) Employment (N): (round to the nearest whole number) Real wage (w): (round to two decimal places) Real interest rate (r): (round to three decimal places). K