An answer for part c would be much appreciated. Thank you.

There are two countries that are identical in every respect, except in their separation and job finding rates. Country A has 5 = 0.02 and f = 0.38. Country B has 5 20.01 and f = 0.19. a. Calculate the natural unemployment rate for both countries. b. What labour market institution can affect the labour market flows in this way? Explain. Assume now that country A wants to make their labour market more flexible and introduces a new form a labour contract. This new contract is such that you can more easily fire workers, and it is designed for low skilled workers. Assume the fraction of workers that are low skilled is a = 0.6. The old contract type has the separation and job finding rate seen in the previous questions (3H 2 0.02,fH = 0.38) while the new one hasl the same separation ofjob finding rate as in country B (3;, = 0.01,]; = 0.19). c. For simplicity assume that high skilled workers can only be hired with the old contract, and low skilled workers can only be hired with the new contract. Write down the equations that describe the dynamic of the labour market in country A after the reform. (Hint: notice that now there are two types of workers!) d. Find the natural rate of unemployment for this economy. Discuss your results