6. Expectations and the modern view of the Phillips curve The following graph shows the short-run Phillips curve within the expectations framework. On the graph, place the grey point (star symbol) to illustrate a situation in which people accurately anticipate the inflation rate. (? Correct Expectations w N Overestimate Inflation o ACTUAL MINUS EXPECTED RATE OF INFLATION (Percent) is -5 O UNEMPLOYMENT RATE (Percent) 10 When people accurately anticipate the inflation rate, the natural rate of unemployment is % On the previous graph, place the black point (plus symbol) to illustrate a situation in which people overestimate inflation by 3%. Activate Windows When people overestimate inflation, the resulting unemployment rate is the natural rate. Go to Settings to activate Windo True or False: The modern view of the Phillips curve indicates that to keep the unemployment rate low, policymakers should follow policies consistentCorrect Expectations w . + N Overestimate Inflation O ACTUAL MINUS EXPECTED RATE OF INFLATION (Percent) -5 UNEMPLOYMENT RATE (Percent) 10 When people accurately anticipate the inflation rate, the natural rate of unemployment is % On the previous graph, place the black point (plus symbol) to illustrate a situation in which people overestimate inflation by 3%. When people overestimate inflation, the resulting unemployment rate is the natural rate. True or False: The modern view of the Phillips curve indicates that to keep the unemployment rate low, policymakers should follow policies consistent with low and steady inflation. O True O False