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Changes in the natural rate of unemployment

a. Repeat Problem 8 but now draw separate graphs for


period 1970 to 1990 and the period since 1990.

b. Do you find that the relation between inflation and unemployment

is different in the two periods? If so, how

has the natural rate of unemployment changed?

Top Answer

b) The NRU can also be described as a rate that is necessary to keep the rate of inflation unchanged. The NRU in the USA... View the full answer


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