Alicia is currently studying full-time but keeping an eye on the job market f...
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Alicia is currently studying full-time but keeping an eye on the job market for positions to take up when she graduates. If she finds something suitable, she will start right away, otherwise she will actively job search once she graduates. Philip lost his job in a construction company in Jan 2025 and has been looking for another since then.
a. In the above example, explain what is the effect on participation rate and unemployment rate and the equilibrium unemployment rate (natural rate of unemployment).
b. The government decides to spend $100million on infrastructure projects to create more jobs. Would this help reduce unemployment in the above example? Why/why not?
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