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Assume the firm mark up over the cost is 10% and the wage setting equation is W=P (1-u) where U is the unemployment rate.
a) Search the real wage rate implied by the price setting equation.
b) Examine the natural rate of unemployment.
c) Place the wage- setting and price setting equation or a property labelled graph and identity the nature rate of unemployment.
critically analyze Mr. Vincent''s reasoning?
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