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2. We saw that the steady-state rate of unemployment is U s L s+f' Suppose that the unemployment rate does not begin at this level.

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2. We saw that the steady-state rate of unemployment is U s L s+f' Suppose that the unemployment rate does not begin at this level. Show that unem- ployment will evolve over time and reach this steady-state. (Hint: Express the ehange in the number of unemployment as a function of s, f? and U. Then show that if unemployment is above the natural rate, unemployment l'allsia and if unemployment is below the natural rate, unemployment Ines.)

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