Suppose the rate of job finding (a) is 0.357, while the rate of job separation (ß) is 0.018. If there are 100,000 people in the (fixed) labor force and 6,000 of them are unemployed, the unemployment rate is currently equal to percent. Given the values for a and ß, the number of people who find a job this month will equal and the number of people who lose or leave a job this month will equal Because there are (more/fewer) people finding a job than losing or leaving one, the rate of unemployment is expected to change until it reaches the steady-state equilibrium value of
Suppose the rate of job finding (a) is 0.357, while the rate of job separation (ß) is 0.018. If there are 100,000 people in the (fixed) labor force and 6,000 of them are unemployed, the unemployment rate is currently equal to percent. Given the values for a and ß, the number of people who find a job this month will equal and the number of people who lose or leave a job this month will equal Because there are (more/fewer) people finding a job than losing or leaving one, the rate of unemployment is expected to change until it reaches the steady-state equilibrium value of
Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations
Section: Chapter Questions
Problem 2P
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