ZuoTi.Pro
Question

1. Suppose 21 million people are unemployed today in an economy. If the rate of job...

1. Suppose 21 million people are unemployed today in an economy. If the rate of job separation is 0.02 per month and the rate of job finding is 0.08 per month, what is the natural rate of unemployment? If labor force remains unchanged over time and 64 million people are employed in the steady-state of the economy, how many people are unemployed in the steady-state?

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Natural unemployment rate = Job separation rate / (Job separation rate + Job finding rate)

= 0.02 / (0.02 + 0.08)

= 0.02 / 0.1

= 0.02 = 20%

Number employed = Labor force (LF) x Employment rate = LF x (1 - Unemployment rate) = LF x (1 - 0.2) = LF x 0.8

LF x 0.8 = 64 million

LF = 80 million

Number unemployed = LF x Unemployment rate = 80 million x 20% = 16 million

0 0
Add a comment
Know the answer?
Add Answer to:
1. Suppose 21 million people are unemployed today in an economy. If the rate of job...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Fakeland has 2.3 million employed people and 0.2 million unemployed people. The size of the labour...

    Fakeland has 2.3 million employed people and 0.2 million unemployed people. The size of the labour force is fixed. The job finding rate is 22% and the separation rate is 3%. (a) What is Fakeland’s current unemployment rate? (b) How many unemployed workers will find a job this period? (c) How many employed workers will lose their job this period? (d) Given your answers above, will the number of unemployed people increase or decrease over time? (e) Compute Fakeland’s steady...

  • Question #4 a. Assume that the real wage in an economy is held above equilibrium. i....

    Question #4 a. Assume that the real wage in an economy is held above equilibrium. i. Graphically illustrate how an increase in the supply of labor will change the number of unemployed workers. Be sure to label the axes and the quantities of labor hired before and after the increase in the labor suppl y. ii. Explain in words what happens to the number of unemployed as a result of this change. Page 5 b. i.If the nate of job...

  • 1. In an economy, 2 percent of the employed lose their job every month (s =...

    1. In an economy, 2 percent of the employed lose their job every month (s = 0.02) and 10 percent of the unemployed find a job every month (f = 0.10). a. What is the steady-state rate of unemployment? b. If the economy were at a steady-state unemployment rate and the labour force were 20 million, how many individuals would lose their jobs each month? Suppose the GDP growth rate is 6 percent and inflation is 2 percent. If the...

  • Suppose the economy has a population of 40 million people and a labor force participation rate...

    Suppose the economy has a population of 40 million people and a labor force participation rate of 50%. Furthermore, suppose the natural rate of unemployment in the economy is 7%. If the current number of unemployed people is 3 million people, what is the rate of cyclical unemployment rate? Answer: % Your Answer:

  • Consider a simple model where workers can be either employed or unemployed. If the job separation...

    Consider a simple model where workers can be either employed or unemployed. If the job separation rate is 2% per month and the job finding rate is 53% per month, which of the following is FALSE? a) There are more workers losing their jobs than there are unemployed workers finding a job b) None of the other options c) The steady state unemployment rate is 3.6% d)The steady state employment rate is 96.4%

  •   Suppose the labor market has the following statistics: Unemployed=1million, Employed=4million, Adult population= 7million. (a) Suppose of...

      Suppose the labor market has the following statistics: Unemployed=1million, Employed=4million, Adult population= 7million. (a) Suppose of the 1million unemployed, 80,000 of them find jobs every month; of the 4million employed,160,000 lose their jobs every month. (i) Calculate and interpret the steady state rate of unemployment (ii) Give an example of a policy that would reduce the rate of job separation. (iii) Suppose this policy reduces the number of people losing their jobs from 160,000 to 120,000. Calculate and explain how...

  • Picture an economy with 100,000 workers in its labor force. The unemployment rate is simply the...

    Picture an economy with 100,000 workers in its labor force. The unemployment rate is simply the number of unemployed workers divided by the number of workers in the labor force. At the beginning of January, the unemployment rate is 4.76%, so 4,760 people in the labor force are unemployed. Suppose that in January, 10% of the workers who were unemployed at the beginning of the month start new jobs. This means that ________ people leave the unemployment category in January....

  • Job separation rate: .04 Job finding rate: .10 Labor force: 100 million In the steady state:...

    Job separation rate: .04 Job finding rate: .10 Labor force: 100 million In the steady state: what is the unemployment rate? How many individuals lose their job each month? How many individuals find jobs each month?

  • In an economy, there are 61 million of employed people, 4 million of unemployed people, and...

    In an economy, there are 61 million of employed people, 4 million of unemployed people, and the population is 109 million. What is the unemployment rate? Express your answer as percentages rounded to 2 decimals if necessary (i.e. 23.567% should be written as 23.57)

  • 3. The table below shows unemployment and labor force statistics for an economy. Actual rate of...

    3. The table below shows unemployment and labor force statistics for an economy.Actual rate of unemployment3%Natural rate of unemployment4%Population of the country125mitlonNumber of people employed97miltionNumber of people unemployed3 millionNumber of people employed part-time5 millionNumber of discouraged workers2 milliona. Calculate the size of the labor force.b. Calculate the labor force participation rate. Show your work.c. Given the state of the economy described in the table, is actual real output less than, greater than, or equal to potential real output? Explain.d. Calculate...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT