Suppose the expectations augmented Phillips Curve for anecon

Suppose the expectations augmented Phillips Curve for aneconomy is given byπ = πe + .08 – 2 u  where πe = π-1Okun’s Law for this economy is  Δu =-0.5 (gy – .03)Unemployment is initially equal to the natural rate ofunemployment and has been for a number of years.  The annual inflation rate is initially tenpercent (π = .1) and has been ten percent for a number of years.a)  Whatis the natural rate of unemployment for this economy?  Showyour calculation and explain why theunemployment rate cannot differ from this “natural rate” year after year.

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