Once you have identified the unexpected inflation from the Phillips curve:
A)add the nominal interest rate to arrive at the real interest rate.
B)equate it to the actual inflation rate.
C)add the expected inflation rate to get the actual inflation rate.
D)subtract the expected inflation rate to get the actual inflation rate.

Question

Quizplus · Accepted Answer

The Phillips curve relates inflation and unemployment, and unexpected inflation is the difference between actual and expected inflation. To find the actual inflation rate, add the expected inflation rate to the unexpected inflation.

Once You Have Identified the Unexpected Inflation from the Phillips