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Problem based on phillips curve

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Reference no: EM131017088

Suppose the Phillips curve is represented by the following:

πt = πte + 0.20 - 2ut where πte = θπt=1

Assume θ = 0.8, πt=1 = 0.10 (10%) and ut = 0.05 (5%). Calculate πt.

Reference no: EM131017088

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