The equation for the Phillips curve in an economy is ? = ?e ? 0.5(U ? 5) ,
If the inflation rate is 2 percent and the expected inflation rate is 4 percent, the unemployment rate in the economy must be
A) 3.0 percent.
B) 4.5 percent.
C) 8.0 percent.
D) 9.0 percent.
Correct Answer:
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