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Use the search model of unemployment to answer the following questions: (a) Determine the effects of a decrease in EI on the reservation wage and
Use the search model of unemployment to answer the following questions: (a) Determine the effects of a decrease in EI on the reservation wage and on the long run unemployment rate, in the search model of unemployment and explain your results. (b) What are the moral hazard problems associated with EI? Refer to both the search model and the efficiency wage model. Briefly discuss government solutions to these problems
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