1. Using annual data since 1956, create scatter plots of the following variables:

a. CPI inflation rate (December to December) against the average unemployment rate for the year. h. CPI inflation rate against the cyclical unemployment rate. (The cyclical unemployment rate is the actual unemployment rate minus the natural unemployment rate, where the natural unemployment rate is measured by the nonaccelerating inflation rate of unemployment, NAIRU, which can be found at the Web site of the Congressional Budget Office, www.cbo.go1!budget/econproj.xls.)

c. Change in the cpr inflation rate from the previous year against the cyclical unemployment rate. Discuss your results in light of the theory of the Phillips curve.