Suppose an economist estimates, in Country X, the job separation rate be 4 percent while the job finding rate be 16 percent. a. Find the natural rate of unemployment of Country X. b. Giving the rising trend of “gig-economy”, more people are working as freelancers. They tend to leave their jobs more rapidly. Briefly explain its effect on the natural rate of unemployment calculated in (a). c. Briefly explain the limitations of using this model to estimate the natural rate of unemployment.
Suppose an economist estimates, in Country X, the job separation rate be 4 percent while the job finding rate be 16 percent. a. Find the natural rate of unemployment of Country X. b. Giving the rising trend of “gig-economy”, more people are working as freelancers. They tend to leave their jobs more rapidly. Briefly explain its effect on the natural rate of unemployment calculated in (a). c. Briefly explain the limitations of using this model to estimate the natural rate of unemployment.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose an economist estimates, in Country X, the job separation rate be 4 percent
while the job finding rate be 16 percent.
a. Find the natural rate of
b. Giving the rising trend of “gig-economy”, more people are working as freelancers.
They tend to leave their jobs more rapidly.
Briefly explain its effect on the natural rate of unemployment calculated in (a).
c. Briefly explain the limitations of using this model to estimate the natural rate of
unemployment.
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