Suppose the expected and actual inflation rates are 7 percent a year and the natural unemployment rate

Question:

Suppose the expected and actual inflation rates are 7 percent a year and the natural unemployment rate is 6 percent. If the inflation rate falls to 5 percent a year and the expected inflation rate also falls to 5 percent a year, what happens to the unemployment rate?

Fantastic news! We've Found the answer you've been seeking!