Question

the economy were at a steady-state unemployment rate with a separation rate of 0.02 per month and a job-finding rate of 0.10 per month, and the labor force was 100 million, how many individuals would lose their jobs each month

Answer 1

2 million individuals will lose their jobs each month

Explanation:

From the question, we are told that the total population is 100 million individuals.

we are also told that separation rate = 0.02 per month

the job-finding rate = 0.10 per month

The individuals who lose their jobs is the same as the individuals with job separation, hence the number of individuals who lose their jobs each month:

= 0.02 × total population

= 0.02 × 100,000,000 = 2 million individual, which is 2% of the total population.