The Equation for the Phillips Curve in an Economy Is

question 44

Multiple Choice

The equation for the Phillips curve in an economy is ? = ?^e ? 0.5(U ? 5) ,
If the inflation rate is 4 percent and the unemployment rate is 6 percent, then the expected inflation rate in the economy must be

• A)2.5 percent.
• B)4.0 percent.
• C)4.5 percent.
• D)5.0 percent.

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Definitions:

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