.If with the Reserve Bank’s “concerns about rising inflation,” people increase the expected inflation rate, explain how the short-run tradeoff will change.
11.If actual inflation had risen prior to the Reserve Bank raising the overnight rate, explain how the short-run tradeoff would change.
12.Read Eye on the Tradeoff on p. 387. How can the Phillips curve account for the combination of inflation and unemployment in 2011? Do the data for that year mean that there is no tradeoff?
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