申論題

3. Country A's Phillips curve can be written as:

where u is the unemployment rate, un is the natural unemployment rate, and π is the current inflation rate. Please answer the following questions in detail.

C. (5 points) Following (B), suppose Country A announces to set an 3% infation target in the coming year. Under the assumption of rational expectation and other things remaining the same, what will the current unemployment rate change?