Suppose that the Wage-Setting (WS) equation is W = P(2-10u), where u is the unemployment rate. Find the markup rate over wage if the natural rate of unemployment is 12%. Show your calculations. 2.2 Real Exchange Rate (RER) Suppose that 1 kg of apple was $2.5 in the United States, 1.25 in UK, and the nominal exchange rate was $2/ in 2009. In 2010, 1 kg of apple became $3.75 in the United States, 1.875 in UK, and the nominal exchange rate did not change. Did the real exchange rate appreciate or depreciate from the viewpoint of US? Show your calculations. CK EXAM 2.3 Interest Parity condition Consider a financial investor choosing between US bonds and Japanese bonds. Suppose that one-year interest rate on US bonds is 3% and the one-year interest on Japanese bonds is 1%. Use the exact formula to determine the rate of appreciation or depreciation of Japanese Yen for the investor prefer to invest in Japan? Show your calculations.