In the expectations-augmented Phillips curve, pi = pi(e) - 3(u -u(bar)). If pi = 0.06 when pi(e) = 0.06 and u = 0.04, then u(bar) =
a. 0.04.
b. 0.05.
c. 0.03.
d. 0.02.
Answer: A
FIN 201
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