Please answer those two questions (a,b,). I won\'t rate unsatisfied answers or s

Question

Please answer those two questions (a,b,). I won't rate unsatisfied answers or seems wrong answers. please write correct answers briefly. Question: Suppose the economy has the following Phillips curve ?=E?-4(u-u^n) Suppose the natural rate of unemployment is 6% and monetary policy targets 3% inflation for the upcoming year. Assume there are no shocks. a) If inflation over the past year was 2%, what will unemployment have to be this year for monetary policy to achieve its inflation target? b) If monetary policy maintains its 3% target, what must unemployment be NEXT year?

Explanation / Answer

A)Three factors in particular have adversely affected the pace of recovery in the UK. The first is an especially deep and protracted squeeze on the level of many people

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