Question

If in an economy, there are no supply shocks and expected inflation is 5% over the next year. Determine the inflation rate that is depicted by the short run Phillips curve at the natural rate of unemployment?
a) 0%.
b) Between 0% and 5%.
c) Over 5%
d) 5% O A O B D​

Answer 1

Answer:

0 percent because there was no supply of shocks then how we expected inflation