Question

During the course of a​ year, the labor force consists of the same 812 people. Of​ these,19 lack skills that employers desire and hence remain unemployed throughout the year. At the same​ time, every month during the​ year, 20 different people become​ unemployed, and 20 other different people who were unemployed find jobs. There is no cyclical unemployment.

a.)Calculate thr frictional unemployment rate _____% (rounded to two decimal places)

b.) Calculate the unemployment rate ______% (rounded to two decimal places)

c) Suppose that a system of unemployment compensation is established each month, 20 new people (not including the 19 that lack required skills) continue to become unemployed, but each monthly group of newly unemployed now takes two months to find a job. Calculate the frictional unemployment rate after this change _____% (rounded to two decimal places)

d.) After the chang in part (c), calculate the unemployment rate _______% (rounded to two decimal places)

Answer 1

a.)Calculate thr frictional unemployment rate _____%

Solution: 2.46%

Working: 20/812 *100 = 2.46%

b.) Calculate the unemployment rate ______%

Solution: 4.80%

Working: (19+20)/812 = 4.80%

c) Suppose that a system of unemployment compensation is established each month, 20 new people (not including the 19 that lack required skills) continue to become unemployed, but each monthly group of newly unemployed now takes two months to find a job. Calculate the frictional unemployment rate after this change _____%

Solution: 4.93%

Working: 2.46 * 2 = 4.93%

d.) After the change in part (c), calculate the unemployment rate _______%

Solution: 7.27%

Working: (19+20+20)/812 = 7.27%