You can answer this question for extra credit after you have answered two questions from above. The equation for the Phillips curve is given by, π, π .12 1.5u, Suppose tº 4%. Calculate the inflation rates for periods 1 and 2 if the unemployment rate is maintained at 6%. Are these results consistent with NAIRU? Explain. (i) (ii) Suppose from period 3 the expected rate of inflation is given by the previous period's actual rate of inflation: To My 1. Calculate the inflation rates for periods 3 and 4 if the unemployment rate is maintained at 6%. Are these results consistent with NAIRU? Explain. Hint: First, from the equation of the Phillips Curve you need to calculate the natural rate of unemployment