Suppose that in any given period an unemployed person will find
a job with probability .6...
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Advance Math
Suppose that in any given period an unemployed person will finda job with probability .6 and will therefore remain unemployed witha probability of .4. Additionally, persons who find themselvesemployed in any given period may lose their job with a probabilityof .3 and will have a .7 probability of remaining employed.
Set up the Markov transition matrix for this problem
There are 1000 people in the economy. At period 0, half ofthe
population is unemployed, what will be the number ofunemployed
people after 1 period?
What will be the number of unemployed people after 4 period?
What is the steady-state level of unemployment?
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