Can economic growth initially increase unemployment?
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Date: 01/21/05
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Date: 21 Jan 2005 08:15:55 -0800
1.- The economy expands
2.- The demand curve for workers goes up, increasing salaries.
3.- Workers see plenty of attractive opportunities out there so they
quit to search for better jobs
4.- The number of volunatirly unemployed goes up (frictional
unemployment)
5.- Thus, the unemployment numbers go up temporarily, but eventually
lower.
Is this assumption correct or incorrect?
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