Suppose that there is a fixed number of workers.
Each worker is at a certain instance either employed or unemployed.
The average duration of a period of unemployment is Du=10 months, and the average duration of a period of employment is De = 40 months.
Use the model of labor market flows between these two states to answer the following questions.
1) What is (in rate per month) the rate of job finding (f) ?
2) What is the rate of job separation (s) ?
3) What is the equilibrium unemployment rate (u) ?
The answers are as followed
1) 0.1
2) 0.025
3) 20%
Could you give me how to solve with a fomular? especially, how to calculate 1) S and 2) F.