I already have the answer to B, however, how do I then use the results from B to answer C? I have inflation and unemployment numbers but without α, how can I find Un?
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The linear trend lines from (a) correspond to a relationship of the form πt-πt-1= bo+b1 × ut.2 Express this relationship in the form πt - πt-1 = −α × (ut — Un) and determine a and un
(c) Use the results from (b) to find estimates of the natural rates of unemployment for the euro area and Austria. What do you observe?