Consider the following economy with the total labor force L. The production technology is given by Y=AN Where Y is the output,Ais labor productivity N is the number of employed. In the labor market, wages are set according to the following equation: to = Apz( 1 u) (1) Suppose the markup is given by m. Write down the PS curve. (2) What is the equilibrium real wage in this economy? (3) Calculate the natural rate of unemployment (4) Calculate the natural output level of this economy Now, let's work with some numbers. Assume that L = 100, A = 1, z = 1, and m = 25%. (5) Calculate the natural rate of unemployment, real wage, and output (6) Suppose the markup increases to 50%. What would be the effect on the natural rate of unemployment and teal wage? Can you graphically represent this? Which curve has moved? What would be the intuition behind this? (7) Consider an increase in unemployment benefits. What will happen to the natural rate of unemployment why