Given the Augmented Phillips Model: Given the Augmented Phillips Model

Multiple Choice

Given the augmented Phillips model: Given the augmented Phillips model: y = β₀ + β₁x₁+β₂x₂ +ε,where y = actual rate of inflation (%) ,x₁ = unemployment rate (%) ,and x₂ = anticipated inflation rate (%) .The response variable or variables(s) in this model is (are) the ___________________.

A) unemployment rate
B) actual inflation rate
C) anticipated inflation rate
D) unemployment rate and anticipated inflation rate