dse 2011

[seema]

Suppose the following equation holds for an economy, at every time t : P(t)= (1+a)W(t)N(t)/Y(t)
That is the price of outut is a fixed markup over unit labour cost. Let pie be the inflation rate, w be the wage inflation rate and lamda be the rate of growth in lb productivity. Lb productivity = Y(t)/N(t). Which of the following is true

a) w= pie - lamda
b) pie = w+ lamda
c) pie = w- lamda
d) w= lamda- pie

[lovekesh]

Take log both sides and differentiate it. you will get the answer. I think it's c.

[neha]

i am too getting "c"