The relationship between inflation and unemployment is given by
π = π^e - 2(u - ).
(a)Draw a diagram showing a long-run Phillips curve and two short-run Phillips curves that contain the following points:
A: π = .03,π^e = .03
B: π = .06,π^e = .06
C: π = .03,π^e = .06
D: π = .06,π^e = .03
Label points A,B,C,and D in your diagram.
The unemployment rate at point A equals .05.
(b)What are the values of the natural rate of unemployment and the unemployment rates at points B,C,and D?

Question

The relationship between inflation and unemployment is given by
π = π^e - 2(u -

The relationship between inflation and unemployment is given by π = π<sup>e</sup> - 2(u - ). (a)Draw a diagram showing a long-run Phillips curve and two short-run Phillips curves that contain the following points: A: π = .03,π<sup>e</sup> = .03 B: π = .06,π<sup>e</sup> = .06 C: π = .03,π<sup>e</sup> = .06 D: π = .06,π<sup>e</sup> = .03 Label points A,B,C,and D in your diagram. The unemployment rate at point A equals .05. (b)What are the values of the natural rate of unemployment and the unemployment rates at points B,C,and D?

).
(a)Draw a diagram showing a long-run Phillips curve and two short-run Phillips curves that contain the following points:
A: π = .03,π^e = .03
B: π = .06,π^e = .06
C: π = .03,π^e = .06
D: π = .06,π^e = .03
Label points A,B,C,and D in your diagram.
The unemployment rate at point A equals .05.
(b)What are the values of the natural rate of unemployment and the unemployment rates at points B,C,and D?

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The Answer of The relationship between inflation and unemployment is given by π = π^e - 2(u - ). (a)Draw a diagram showing a long-run Phillips curve and two short-run Phillips curves that contain the following points: A: π = .03,π^e = .03 B: π = .06,π^e = .06 C: π = .03,π^e = .06 D: π = .06,π^e = .03 Label points A,B,C,and D in your diagram. The unemployment rate at point A equals .05. (b)What are the values of the natural rate of unemployment and the unemployment rates at points B,C,and D?

The Relationship Between Inflation and Unemployment Is Given by