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If the Fraction of Employed Workers Who Lose Their Jobs

Question 16

Multiple Choice

If the fraction of employed workers who lose their jobs each month (the rate of job separation) is 0.01 and the fraction of the unemployed who find a job each month is 0.09 (the rate of job findings) , then the natural rate of unemployment is:


A) 1 percent.
B) 9 percent.
C) 10 percent.
D) about 11 percent.

Correct Answer:

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