Unemployment and inflation pose a trade-off problem with one being employed at the expense of the other, seriously hampering efforts to deal effectively with poverty, crime, pollution, and other domestic problems. When unemployment is high, real income is relatively low so the nation feels that it cannot afford measures to solve these questions. But when inflation is high, spending is resisted for fear of contributing to higher inflation. As national policy concern shifts from unemployment to inflation and back again, aggregate demand measures are shifted alternately to supply economic restraint or stimulus with many undesirable side effects and no real solution to the problem. In their search for more promising policy approaches, the authors conclude that monetary and fiscal policies have reached the limits of their capability to attain lasting full employment and price stability. For further improvement we must seek structural change in the economy. Manpower programs have the potential for reducing unemployment without causing inflation. (MF)