Suppose that unemployed workers find jobs at the rate of 15% per period and the job separation rate for employed workers is 5% per period. Assume the size of the labor force is fi xed at 1000. At periodt=0, number of unemployed U0= 200 and employed E0= 800.

Calculate the following (Round up to ONE decimal place if needed. Enter only numbers)

(a) What is the unemployment rate at t=1 in percentage?

(b) What is the natural (steady state) unemployment rate in percentage?

(c) Starting from the steady state where the unemployment rate is at its natural rate, suppose that suddenly the job finding rate falls to 10% and separation rises to 8%, what will be the unemployment rateof one period after in percentage?