2. In this chapter we saw that the steady-state rate of unemployment is U/L = s/(s + f ). Suppose that the unemployment rate does not begin at this level. Show that unemployment will evolve over time and reach this steady state. (Hint:

Express the change in the number of unemployed as a function of s,

f, and U. Then show that if unemployment is above the natural rate, unemployment falls, and if unemployment is below the natural rate, unemployment rises.)