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This question refers to the job search model of the natural rate of unemployment that we...

This question refers to the job search model of the natural rate of unemployment that we covered in the additional material to chapter 15. Suppose the economy is in a long-term equilibrium (at a steady-state unemployment rate), with a separation rate of 0.03 per month and a job finding rate of 0.12 per month. Assume the labor force is 200 million people. In equilibrium, how many individuals lose their jobs each month?

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Answer #1

Hence, 4.8 million individuals lose their job each month.

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