9. Many people think that the process of putting computer technology to

work and incorporating computers into the workplace is causing a

massive restructuring of virtually every institution of modern life. If

they are right, what are the implications for unemployment? What kind

of unemployment would be affected?

10. The natural unemployment rate in the United States has varied over the

last 50 years. According to the Congressional Budget Office, the natural

rate was 5.5% in 1960, rose to about 6.5% in the 1970s, and had declined

to about 4.8% by 2000. What do you think might have caused this

variation?

11. Suppose the Fed begins carrying out an expansionary monetary policy

in order to close a recessionary gap. Relate what happens during the

next two phases of the inflation-unemployment cycle to the maxim

"You can fool some of the people some of the time, but you can't fool all

of the people all of the time."

Chapter 16 Inflation and Unemployment

16.4