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Macroeconomics

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Full Employment with Separation and Finding Rates

MACRO-QULLTJ

Consider a simple model of frictional unemployment where the job finding rate ($f$) and job separation rate ($s$) are constant over time. Assume that all individuals in the economy are workers and that workers are either employed or unemployed. Further, suppose that the total available workforce is also fixed at 1,000,000 workers.

If there is no structural unemployment in the economy, then what will be the unemployment rate when the economy reaches full employment? Write your answer as number, i.e. write 15% as 0.15.