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This question is related to Intermediate Macroeconomics, if you answer and provide step by step solution, I would be appreciated! Q.1 Consider the DMP model.

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This question is related to Intermediate Macroeconomics, if you answer and provide step by step solution, I would be appreciated!

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Q.1 Consider the DMP model. Low unemployment is a commonly pursued goal of governments. A subsidy, s, given to rms to encourage more hiring is a policy option that can be implemented with the intended goal of increasing employment and reducing the unemployment rate. (17 marks) a) What is the firm's surplus, consumera'worker surplus and total surplus with the introduction of a subsidy? (3 marks) 1)) Using Nash Bargaining what is the real wage solution? (2 marks)

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