Question9 1 pts For this question assume that the Phillips c

Question9 1 pts For this question, assume that the Phillips curve equation is represented by the following equation ? _ ?1-1 = (m + z) _ ?ut . Which of the following will NOT cause an increase in the natural rate of unemployment? an increase in the expected rate of inflation a reduction in m an increase in ? O a reduction in z all of the above

Solution

ans....
An increase, in the unemployment rate will cause decrease in the inflation rate over time. When inflation has been persistent, high unemployment rates will likely be associated with reductions in the inflation rate.
A reduction in the expected inflation rate NOT cause a reduction in the natural rate of unemployment
Hence the correct option is a