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a. Derive the original Phillips Curve equation from wage and price settings. b. According to your findings in part a, what does this equation means
a. Derive the original Phillips Curve equation from wage and price settings. b. According to your findings in part a, what does this equation means in terms of unemployment and inflation. What are the reasons of tradeoff between unemployment and inflation? 2) What is adaptive expectations mean? Show your answer with equations. Rewrite the Phillips Curve equation by implementing adaptive expectations assumptions on inflation
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