Suppose That a Country Has Two Types of Workers-Young Workers

Suppose that a country has two types of workers-young workers and older workers.Young workers make up 10 percent of the labor force and normally have a group unemployment rate of 15 percent.Older workers comprise the rest of the labor force and normally have a group unemployment rate of 5 percent.What is the country's natural rate of unemployment? If twenty years earlier,the country experienced a baby boom such that the labor force composition of young workers now jumps to 20 percent,what is the country's new natural rate of unemployment? Comment on your calculations.

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Initially,the natural rate of unemployme...

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