Problem
1. Why do efficiency wages generate involuntary unemployment? exercise 4 What factors prevent the market from clearing in efficiency wage models?
Exercise 4
Discuss how it is simultaneously possible for "most" unemployment to be due to short spells and for "most" unemployment to be accounted for by persons in very long spells.
2. Why is the Phillips curve vertical in the long run?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.