Question 2. An Estimate of the Natural Rate of Unemployment [2 marks] Using the natural rate of unemployment, the Phillips curve equation can be rewritten as: I t - (ut - u*) + g (aggregate-supply factors), (1) where is assumed to be positive, and the minus sign implies that the relationship is inverse. t = (a) What data are required to estimate equation (1)? Discuss. [1.0 mark] (b) Let us assume that we obtain the following estimation of the equation of the regression line (1): t= 1.4 -0.22ut +errort Could you use this equation to estimate the natural rate of unemployment? Explain. [1.0 mark]