The city of Hope has a labor force of 1000. Twenty people lose their jobs each month and remain unemployed for exactly one month before finding jobs. On January 1, May 1, and September 1 of each year, 50 people lose their jobs for a period of four months before finding new jobs. What is the average duration of an unemployment spell?
A. 3.43 months
B. 2.85 months
C. 2.15 months
D. 3.14 months
Answer: C
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All of the following are aspects of macroeconomics EXCEPT
A) the U.S. unemployment rate. B) the production decisions of a pharmaceutical firm. C) the budget deficit of the United States. D) foreign trade.
A monopolist faces the least price-elastic demand curve because:
a. the consumers have only one place to buy the good. b. the monopolist produces a standardized product. c. the monopolist undertakes a huge expenditure to produce the product. d. the monopolist supplies to an insignificant portion of the market. e. the monopolist produces an absolutely necessary good having close substitutes.
What happens to aggregate demand when government spending and the taxes to pay for it both rise by the same amount?
A. There is no effect. B. Aggregate demand rises by the amount of the government spending times the multiplier. C. Aggregate demand rises by the amount of the government spending. D. Aggregate demand falls by the amount of the government spending.
Suppose you are a lender and you expect inflation to be 4 percent over the next year because inflation was 4 percent in the last year. If you want to earn a real return of 2 percent on any loans you make, you will set the interest rate on your loans equal to:
A. 2 percent. B. 6 percent. C. 10 percent. D. 4 percent.