Problem: 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 they lack sufficient skills to obtain jobs.
1. What is the nation's frictional unemployment rate?
2. What is its structural unemployment rate?
3. What is its unemployment rate?