1. The text outlines three kinds of unemployment: Frictional, Structural, and Cyclical. The Bureau of Labor Statistics describes a fourth kind, seasonal unemployment, as: "The seasonal fluctuations in the number of employed and unemployed people reflect not only the normal seasonal weather patterns that tend to be repeated year after year, but also the hiring (and layoff) patterns that accompany regular events such as the winter holiday season and the summer vacation season." Of the four, structural unemployment is the most challenging for people.
2. If technological change increases structural unemployment, why do most governments and economists encourage such change? Prepare a 2-page paper on this topic. Cite references to material that you use in preparing the essay.
3. Suppose that declining resource supplies reduce potential output in each period by 4%. What kind of monetary policy would be needed to maintain a zero rate of inflation at full employment?
4. The Humphrey-Hawkins Act of 1978 required that the federal government maintain an unemployment rate of 4% and hold the inflation rate to less than 3%. What does the inflation-unemployment relationship tell you about achieving such goals?
5. 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?