Using annual data since 1956, create scatter plots of the following variables:
a. CPI inflation rate (December to December) against the average unemployment rate for the year. (Note: You may wish to use the data converter that is available on this textbook's Web site, www. pearsonhighered.com/abel, to calculate the CPI each December.)
b. CPI inflation rate against the cyclical unemployment rate. (The cyclical unemployment rate is the actual unemployment rate minus the natural unemployment rate.)
c. Change in the CPI inflation rate from the previous year against the cyclical unemployment rate. Discuss your results in light of the theory of the Phillips curve.