Attempt it if you are very confident

Problem 1: Assume the aggregate production function of the economy is well represented by the following equation: Y = N.

1. Under this assumption, plus the relations you know from the labor market, produce an equation relating aggregate output, Y , to the labor force, L, and the unemployment rate, u.

2. Use your previous answer to produce an equation relating the natural level of output, Yn, to the labor force, L, and the natural rate of unemployment, un.

3. Assume the labor force is L = 1, 000 and that the natural rate of unemployment is the one you found in Problem 1, Question 2. Given these assumptions, find the natural level of output Yn.