An Analysis of Robe.. An Analysis of Robe... Democracy and Its.. Other bookmarks Question 6 Not yet answered Marked out of 1.00 Remove flag In the republic of the Overworld the aggregate supply has the equation Y=Y*+100 (-n) where Y denotes output, Y* denotes potential output, it denotes the inflation rate and a denotes the expected rate of inflation. Also assume that Y-Y*=-25(u-u*) , where u denotes the unemployment rate and u* denotes the natural rate of unemployment. Assume that the central bank of Overworld has an inflation target of 3 percent, but inflation in Overworld has been above target at 5 percent. What is the impact on the output and unemployment rate of Overworld if the inflation target is credible? Select one: O a. Output is 100 units below potential and unemployment is 8 points above the natural rate of unemployment b. Output is 200 units above potential and unemployment is 8 points below the natural rate of unemployment O c. Output is 200 units below potential and unemployment is 4 points above the natural rate of unemployment d. Output is 100 units above potential and unemployment is 4 points below the natural rate of unemployment 434 PM 13'C Partly cloudy ~ 44 W O Type here to search