For this question, assume that the expected rate of inflation is a function of the past year's inflation. Also, assume that the unemployment rate has been equal to the natural rate of unemployment for a number of years. Given this information, we know that:
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Home » Business » For this question, assume that the expected rate of inflation is a function of the past year's inflation. Also, assume that the unemployment rate has been equal to the natural rate of unemployment for a number of years.