Explain the model of labor flows (bathtub model). Define the job separation and the job finding rates. How are these related to job creation and job destruction? How is the natural rate of unemployment determined in the model? How does

Macroeconomics: Private and Public Choice (MindTap Course List)
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Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
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Chapter8: Economic Fluctuations, Unemployment, And Inflation
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Explain the model of labor flows (bathtub model). Define the job separation and the job finding rates. How are these related to job creation and job destruction? How is the
natural rate of unemployment determined in the model? How does a rise in the job finding rate affect unemployment? An increase in the job separation rate?

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