Use the following information to answer the next two questions. Consider the Phillips curve =t-(u-u*) with...

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Use the following information to answer the next two questions. Consider the Phillips curve л=лt-ε(u₁-u*) with ε=1.4, u*=0.06, and é²=0.03. Suppose that u。=u*. Suppose the current government pressures the RBA to bring the economy to an inflation rate of 0.04 for the next period. With adaptive expectations, what unemployment rate will result from the policy? (enter "x" without the quotes if there is not an inflation rate that can produce the target unemployment.) Report your answer as a decimal fraction up to two decimal points. Use the information from the previous question. Suppose instead that expectations are rational and that the public anticipates the move by the RBA. What unemployment rate would result? An unemployment rate between the target and u* Unemployment equal to u* An unemployment rate equal to the target An unemployment rate below the target Use the following information to answer the next two questions. Consider the Phillips curve л=лt-ε(u₁-u*) with ε=1.4, u*=0.06, and é²=0.03. Suppose that u。=u*. Suppose the current government pressures the RBA to bring the economy to an inflation rate of 0.04 for the next period. With adaptive expectations, what unemployment rate will result from the policy? (enter "x" without the quotes if there is not an inflation rate that can produce the target unemployment.) Report your answer as a decimal fraction up to two decimal points. Use the information from the previous question. Suppose instead that expectations are rational and that the public anticipates the move by the RBA. What unemployment rate would result? An unemployment rate between the target and u* Unemployment equal to u* An unemployment rate equal to the target An unemployment rate below the target

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aGiven Phillips curve equation is t t e u t u Values are given as follows 14 u006 t e 005 u 0 u government pressures the RBA to bring the economy to a... View the full answer