1. Suppose the natural rate of unemployment is 6 percent. On one graph, draw two Phillips curves that can be used to describe the four situations listed here. Label the point that shows the position of the economy in each case.

a. Actual inflation is 5 percent and expected inflation is 3 percent.

b. Actual inflation is 3 percent and expected inflation is 5 percent.

c. Actual inflation is 5 percent and expected inflation is 5 percent.

d. Actual inflation is 3 percent and expected inflation is 3 percent.