1 "In order to achieve the nonperfectionist's goal of high enough output to give us no more than 3 percent unemployment, the price index might have to rise by as much as 4 to 5 percent per year." (Paul Samuelson and Robert Solow, American Economic Association meetings, December 1959)

(a) Do you think that a rate of inflation of 4 or 5 percent would enable us to achieve the nonperfectionist's goal of 3 percent unemployment today? Why or why not?

(b) Would a rate of inflation of 15 or 20 percent enable us to achieve the goal? If so, could the 3 percent unemployment level be maintained? Why or why not?