Question

suppose that a nation has a labor force of 100 people. in january, amy, barbara, carine, and denise are unemployed; in february, those four find jobs, but evan, francesco, george, and horatio become unemployed. suppose further that every month, the previous four who were unemployed find jobs and four different people become unemployed. throughout the year, however, the same three people — ito, jack, and kelley — continually remain unemployed because their skills are a poor match with employers requirements.
a. calculate this nations frictional - unemployment rate. ​%
(enter your response as a percentage rounded to two decimal places.)
b. calculate the nations structural - unemployment rate. ​%
(enter your response as a percentage rounded to two decimal places.)
c. calculate the nations unemployment rate. ​%
(enter your response as a percentage rounded to two decimal places.)

Explanation:

Step1: Define frictional unemployment

Frictional unemployment is due to normal turnover in the labor - market. Here, 4 people became unemployed and found jobs, so frictional unemployment is 4 out of 100.
\[ \text{Frictional unemployment rate}=\frac{4}{100}\times100 = 4.00\%\]

Step2: Define structural unemployment

Structural unemployment is due to a mismatch between workers' skills and employers' requirements. 3 people (Evan, Francesco, George, and Horatio) are structurally unemployed out of 100.
\[ \text{Structural unemployment rate}=\frac{3}{100}\times 100=3.00\%\]

Step3: Define total unemployment

Total unemployed are the 3 structurally unemployed.
\[ \text{Unemployment rate}=\frac{3}{100}\times100 = 3.00\%\]

Answer:

a. 4.00
b. 3.00
c. 3.00