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

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

b. Calculate the growth rate of full-employment output in years 2, 3, and 4 by using the values for full-employment output that you found in part (a).