Q3. Finding the finding rate. To keep things simple, the textbook model focuses on a situation where employment and the labour force are constant, and assumes that the employed and the unemployed have the same probability of finding a job in a given month, and this probability is denoted f. We would like to find the value of f.

(a) The textbook model also makes use of the variables s, Z, N, U, L and u. What are these?

(b) How many job openings are there each month?

(c) How many people are seeking a job?

(d) What is the probability that a job seeker finds a job in a given month?

(e) How does the value of that you just found depend on s, u, and Z? Give an intuitive interpretation for each variable.