This problem set is due on Feb 19, Tuesday in class.
Problem Set 5
ECN101
Instructor: Masako Miyanishi
Chapter 6: Unemployment
1. In a steady state,
a. no hiring or firings are occurring.
b. the number of people finding jobs equals the number of people losing jobs.
c. the number of people finding jobs exceeds the number of people losing jobs.
d. the number of people losing jobs exceeds the number of people finding jobs.
Answer:
2. If the steadystate rate of unemployment equals 0.125 and the fraction of unemployed workers who
find jobs each month (the rate of job finding) is 0.56, then what is the fraction of employed workers who
lose their jobs each month (the rate of job separations)?
3.
Any policy aimed at lowering the natural rate of unemployment must either ______
the rate of job
separation or _______ the rate of job finding.
a. reduce; reduce
b. increase; reduce
c. reduce; increase
d. increase; reduce
Answer:
4. Which of the following is an example of frictional unemployment?
a. Dave searches for a new job after voluntarily moving to San Diego.
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 Winter '08
 Miyanishi
 Unemployment, airline Pilot, San Diego. b

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