Question One
(a) What is the difference between frictional and structural unemployment?
(b) Which of the two types of unemployment should policy makers be more concerned about and why?
(c) Given that the population for Zamunda is 19,400,000, and that unemployment rate is 15%. Further you are given that the three population categories not counted in the labour force are students accounting for 2,500,000, those below 15 years old accounting for 3,000,000, and the retired accounting for 1,500,000. Calculate the number of people employed in this economy.
(d) Given that the rate of finding a job in this economy is 85%, find the rate of job separation if this economy is in a steady state of unemployment.