33) Assume there are only two possible states for an individual: either one is employed or one is unemployed (i.e. there is no "out of the labour force" state). Further assume that in an economy the separation rate for employed persons is 1% per month and the

34) In the simple model of labour supply represented in the figure above, the real wage is equal to (A) ________ and the quantity of labour supplied would be equal to (B) ______

35) The figure above shows a labour market in which a union negotiates the real wage rate with employers. Union-voluntary unemployment is equal to (A) ___; Individual-involuntary unemployment is equal to (B) ____.

36) Which of the following policies would NOT be expected to reduce the equilibrium unemployment rate?

37) Consider the specification of money demand: M = kPY Suppose the actual money supply is M* which is not equal to M; according to the neutrality principle, the variable that would adjust to achieve equilibrium is: