## Macro module 24 New Keynesian model practice exam questions

 Author Message NEAS Supreme Being Group: Administrators Posts: 4.3K, Visits: 1.3K Macro module 24 New Keynesian model practice exam questions(The attached PDF file has better formatting.)[The following scenario applies to the next two questions.] The market for a good has imperfect competition. For firms making the good:●    The price of the good = 8.77 per unit●    The real interest rate is 4.0% per annum●    The mark-up ratio is 1.81●    The marginal product of labor = 4.79 units of the good per worker-hour●    The marginal product of capital = 4.90 units of the good per unit of capital●    The price level is 149Question 24.1: Nominal wage rate What is the nominal wage rate per hour? Solution 24.1: The markup ratio = price per unit / [nominal wage rate / marginal product of labor], sonominal wage rate = price per unit / [markup ratio / marginal product of labor]= 8.77 / (1.81 / 4.79) = 23.21Question 24.2: Real wage rateWhat is the real wage rate per hour? Solution 24.2: The real wage rate = the nominal wage rate / the price level = 23.21 / 1.49 = 15.58 Attachments Macro module 24 New Keynesian model practice exam questions.pdf (395 views, 33.00 KB)
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