Changing course, Australia raises interest rate Inflation rate (percent per year) LRPC The Reserve Bank of Australia (the central bank) raised its overnight rate (equivalent to the U.S. federal funds...

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Extracted text: Changing course, Australia raises interest rate Inflation rate (percent per year) LRPC The Reserve Bank of Australia (the central bank) raised its overnight rate (equivalent to the U.S. federal funds rate) by a quarter of a percentage point, to 3.25 percent a year, amid concerns about rising inflation. The interest rate rise came earlier than many economists had expected. 5- Source: New York Times, October 6, 2009 4- If with the Reserve Bank's "concerns about rising inflation," people increase the expected inflation rate, explain how the short-run tradeoff will change. 3- 2- The figure shows Australia's short-run Phillips curve and the long-run Phillips curve. 1- SRPC If the natural unemployment rate remains at 5 percent, show the effect of the rise in the expected inflation rate in the graph. 0- 6 8. Draw either a new SRPC curve (SRPC,) or an arrow along the SRPC curve Unemployment rate (percent of labor force) showing the direction of change. >>> Draw only the objects specified in the question. Selected: Delete Clear none empts Next