Why wage rates differ
Problem
Why Wage Rates Differ. It includes non-wage job characteristics, human capital, and efficiency wages. Share with the class an example you know of one of these, or of some other situation, where wages differ.
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Evaluate your results and use specific reasons and examples to support your answer.
Set the fiscal stimulus parameter to 5% of GDP. How does this impact the size of the GDP by the end of the pandemic as opposed to a no-stimulus scheme? Why?
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In percentage, what is the short-run impact on the price level? In percentage, what is the long-run impact on output?
Why Wage Rates Differ. It includes non-wage job characteristics, human capital, and efficiency wages. Share with the class an example you know of one of these.
Given this information, what type of exchange rate and/or fiscal policy can be used to achieve simultaneously these two goals? Explain.
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After the pandemic, would we expect those economies to grow faster or slower than the US economy? Explain.
Suppose also that the Rupee-Dollar exchange rate today is 84/$. If the forward rate for one year from today is 88/$, what must the US interest rate be?
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