In the expectations-augmented Phillips curve,π = π^e - 3(u - 0.05).When π = 0.03 and π^e = 0.06,the unemployment rate is A)0)04. B)0)05. C)0)06. D)0)07.

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Quizplus · Accepted Answer

The expectations-augmented Phillips curve equation is given as π = π^e - 3(u - 0.05). Substituting π = 0.03 and π^e = 0.06, we get 0.03 = 0.06 - 3(u - 0.05). Solving for u gives u = 0.06.

In the Expectations-Augmented Phillips Curve,π = πe - 3(u -

In the Expectations-Augmented Phillips Curve,π = π^e - 3(u -