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2. Recall the expectations-augmented Phillips Curve from class: 1 = + (z - x) (1) where # and u are inflation and unemployment, respectively. Here
2. Recall the expectations-augmented Phillips Curve from class: 1 = + (z - x) (1) where # and u are inflation and unemployment, respectively. Here is the expected inflation and u is the natural unemployment rate, and he is the slope coefficient. (a) Determine whether the Phillips Curve in (1) is a Classical or Keynesian model. Your credit depends entirely on how you justify your choice
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