The labor market, assume that the pandemic labor market can be characterized by the following two equation

1. The Labor Market. Assume that the pre-pandemic labor market can be characterized by the following two equations: Wage setting equation [WS): W = P"- F (u, z) :>W = P9 [1 at: + z] Price setting equation [F]: P = W[1+m) Perfect price forecast: P 2 Fe Where m = 4%, on: 0.8 and z = 0.01 a) Calculate the natural rate of unemployment (Lin)- (4 points) b) How many workers are in the labor force (L) if there are 100 million employed workers and the rate of unemployment is at its natural rate? (4 points)