Based on the data in this table, U ρ π period 1 6 1 4 period 2 8 0

Based on the data in this table,

U ρ π
period 1 6 1 4
period 2 8 0 3.2
period 3 8 2 4.4

If the natural rate of unemployment is steady at 7 percent, and, in period four, there is no price shock and unemployment is 8 percent, then the inflation rate in period 4 will be ________ percent.
A) 4.4
B) 3.6
C) 3.4
D) 1.6
E) none of the above

ANSWER

B