Final answer:
The unemployment rate is less than 0.06 (6%) when actual inflation exceeds the expected inflation rate according to the expectations-augmented Phillips curve, due to the short-term trade-off between inflation and unemployment. However, this is a temporary situation as the long-run Phillips curve is vertical at the natural rate of unemployment, confirming that no permanent trade-off exists.
Step-by-step explanation:
Based on the expectations-augmented Phillips curve, if the natural rate of unemployment is 0.06 (or 6%), and if the actual inflation rate exceeds the expected inflation rate, then the unemployment rate is less than 0.06 (less than 6%). This is because the expectations-augmented Phillips curve suggests that there is a trade-off between inflation and unemployment in the short run; when actual inflation exceeds expected inflation, firms and workers tend to react to unexpected inflation by increasing production and employment, leading to a lower unemployment rate. However, it's important to understand that this trade-off is temporary and in the long-run, the unemployment rate returns to the natural rate regardless of the inflation rate. This reflects the neoclassical view elaborated by the economist Milton Friedman, highlighting that there is no permanent trade-off between inflation and unemployment.