Suppose that the Phillips curve is given by _t = ^e_t + 0.12 - 2u_t and expected inflation is given by ^e_t = -bar, where -bar is constant at 1%. Suppose that the rate of unemployment is initially equal to the natural rate. in the year t, the authorities decide to bring the unemployment rate down to 3% and hold it there forever. What is the inflation rate at t + 3?

a) 19%

b) 7%

c) 8%

d) all of the answers here are incorrect

e) 26%