Question

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?

Answer #1

Hence, **4.8**
million individuals lose their job each month.

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If the economy were at a steady-state unemployment rate with a
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PART A. What is the natural unemployment rate? How many
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Explain why a policy aimed at lowering the natural rate of
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