Answered: If both the job creation rate and the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If both the job creation rate and the labour force growth rate are positive then

Select one:

a.the participation rate must be rising.

b.the unemployment rate will remain constant.

c.the unemployment rate will fall.

d.the unemployment rate may be rising or falling - it is not possible to say for sure.

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Introduction

When certain workers are unable to find employment in the economy despite actively hunting for it at the wage rates, it becomes a persistent problem known as unemployment. Because some employees frequently change jobs, some level of unemployment is always present in the economy. This is what is referred to as the natural rate of unemployment, which includes both structural and frictional unemployment. While structural unemployment results from structural and technological changes, frictional unemployment is caused by changes in the labour market and when students begin their careers.

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