Suppose that in January, 10% of the workers who were unemployed at the beginning of the month start new jobs. This means that476v people leave the unemployment category in January.Suppose that in January the job separation rate equals 2%. That is, 2% of the people who were employed at the beginning of the month are laid off orquit. This means 1,905 ▼ people are added to the unemployment category that month. (Hint: Round your answer to the nearest whole number.)Assume the size of the labor force does not change from January to February. Considering that the job separation rate is 2% during January, and 10%of unemployed workers find new jobs, the unemployment rate at the beginning of February will be approximately 6.19% ▼.(Hint: Round youranswer to the nearest hundredth.)Generalizing from your calculations for January, if in February, the job separation rate is 2%, and 10% of unemployed workers get jobs, theunemployment rate at the end of February willSuppose that at the beginning of August, the unemployment rate is 4.76%, however, this month just 0.2% of the employed workers becomeunemployed.Suppose that in August, 10% of the workers who were unemployed at the beginning of the month find new jobs. The unemployment rate be at thebeginning of September will be 4.76% ▼(Hint: Round your answer to two decimal places.)Now suppose that in September, the job separation rate returns to normal: 2% of the workers who were employed at the beginning of the monthbecome unemployed. As always, 10% of the workers who are unemployed find jobs during the month.In the last question, you calculated a lower unemployment rate for the beginning of September. Use the numbers of employed workers andunemployed workers implied by this unemployment rate to calculate how many employed workers become unemployed during September and howmany unemployed workers find jobs during September.The unemployment rate at the end of September is6% 3. Understanding unemployment ratesPhelps was suspicious of the tradeoff suggested by the Phillips curve. He thought that sensible, forward-looking people should not change theirbehavior just because the prices on all the price tags in the economy increased at 4% per year instead of at 2% per year.Phelps started his analysis by asking what determines the unemployment rate. One of the key points he recognized was that unemployment is theinevitable consequence of an economy in which some firms go out of business each month and some workers quit their jobs each month. Once aworker is out of a job, the individual will take some time searching for the next one.Consider the following scenario.Picture an economy with 100,000 workers in its labor force. The unemployment rate is simply the number of unemployed workersdivided by the number of workers in the labor force. At the beginning of January, the unemployment rate is 4.76%, so 4,760 people inthe labor force are unemployed.

Question

Accepted Answer

Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…