題組內容

3. Country A's Phillips curve can be written as:
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where u is the unemployment rate, un is the natural unemployment rate, and π is the current inflation rate. Please answer the following questions in detail.

C. (5 points) Following (B), suppose Country A announces to set an 3% infation target in the coming year. Under the assumption of rational expectation and other things remaining the same, what will the current unemployment rate change?