Multiple Choice
The graph below shows an expectations-augmented Phillips curve. If inflation is higher than expected, then unemployment is below the natural rate. If inflation is lower than expected, then unemployment is higher than the natural rate. For example, if inflation is expected to be 5% but actual inflation is 2%, then: 
A) inflation will be at 3%.
B) the economy will be at the point Un.
C) the economy will be at the point
D) the economy will be at the point R.
Correct Answer:
Verified
Correct Answer:
Verified
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