Suppose that half of the workers (1/2) have indexed labour contracts. The Phillips curve is given by at = it? + 0.10 Zut. Expected ination is given by it? = (1 9):? + 97ft_1 where 9 is assumed to be zero. Suppose that the rate of unemployment is initially equal to the natural rate. In year r, 17: is assumed to be 2% and the authorities decide to bring the unemployment rate down to 3% and hold it there forever. What is the ination rate at f + 3