Problem
1. Where would the combination of inflation and unemployment in the UK in 2002 lie on the original Phillips curve diagram?
2. Why is the natural rate of unemployment referred to as ‘natural'?
3. Explain the basis of Milton Friedman's simple rule of monetary policy - that the rate of growth of the money supply in a stable price environment should be kept equal to the rate of change in real income.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.