# Consider an economy where people can be either employed (e) or unemployed (u). let’s normalize e+u â‰¡ 1, so that at any given point in time, e is the fraction of people employed. conditional on b

Consider an economy where people can be either employed (e) or unemployed (u). let’s normalize e+u â‰¡ 1, so that at any given point in time, e is the fraction of people employed. conditional on being employed today, the probability of getting fired is Î´; and conditional on being unemployed today, the probability of finding a job is Ï‰. (a) what is the employment rate tomorrow (et+1) if today’s employment rate is (et)?.