Question: Question 8 Consider the following augmented Phillips curve: me - On-1 = (m + =) -at When & is equal to one there O inflation

Question 8 Consider the following augmented Phillips curve: me - On-1 = (m + =) -at When & is equal to one there O inflation does not depend on inflation in the previous period. inflation expectations are zero. Inflation is very persistent. O The augmented Phillips curve transforms into the original Philips curve. Question 9 Suppose the Phillips curve is represented by :"; - 1-) = 0.2-2 Given this information, we know that the natural rate of unemployment in this economy is: O 2% 0 0% O 10% 0 5%

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