9 You are given the following data on the unemployment rate and output. Year 1 2 Unemployment rate 8% 6% Output 950 1030 3 4 7% 5% 1033.5 1127.5

a. Assume that the natural rate of unemployment is 6% and that (Y - Y)IY = 2(u - 11) . Find the fullemployment level of output in each year.

b. Calculate the growth rate of full-employment output in years 2, 3, and 4 two different ways. First, calculate the growth rates by using the values for full-employment output that you found in part (a). Then calculate the growth rate of full-employment output by using only the change in the unemployment rate, the growth rate of output, and the growth rate version of Okun's law, /'" Y IY = /'" Y IY - 2/'"u, which is similar to Eq. (3.6), except that in Eq. (3.6), /'"y IY = 3 for the United States, where for this economy, /'"Y!Y could differ from 3. Compare your answers from the two sets of calculations.