Compatibility of Claims on Output at Supply-Side Equilibrium
At the supply-side equilibrium unemployment rate, the claims on output per worker from both workers (as real wages) and firm owners (as real profits) are considered compatible. This compatibility occurs because the sum of the real wage that workers receive and the real profit per worker that owners retain precisely equals the total output produced per worker ().
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Introduction to Macroeconomics Course
Ch.4 Inflation and unemployment - The Economy 2.0 Macroeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
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If firms set prices such that their real profit per worker is 20% of the total output per worker, and workers successfully negotiate a real wage that is 85% of the total output per worker, the economy is considered to be at a stable supply-side equilibrium.
In an economy operating at a stable supply-side equilibrium, the total output produced per worker is fully distributed between wages and profits. If firms' real profit per worker constitutes 25% of the total output per worker, then the real wage paid to workers must constitute ____% of the total output per worker for the claims to be compatible.