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Macroeconomics

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Moderate

The Natural Rate of Unemployment: Separation and Finding Rates

MACRO-HYX@Y5

Suppose $\boldsymbol{s}$ is the proportion of employed works who become separated from their job and $\boldsymbol{f}$ is the proportion of unemployed workers who find jobs. Further assume that $\boldsymbol{s}$, $\boldsymbol{f}$ and the amount of people in the labor force are constant.

Which of the following equations correctly calculates the natural rate of unemployment?

A

$\cfrac{\boldsymbol{f}}{\boldsymbol{s}+\boldsymbol{f}}$

B

$\cfrac{\boldsymbol{s}}{\boldsymbol{s}+\boldsymbol{f}}$

C

$\cfrac{\boldsymbol{s}+ \boldsymbol{f}}{\boldsymbol{s}-\boldsymbol{f}}$

D

$\cfrac{\boldsymbol{s}+ \boldsymbol{f}}{\boldsymbol{f}}$