The ________ curves are both vertical.

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve is vertical because it represents a time period in which input prices have fully adjusted to changes in the price level, indicating that output is determined by factors other than the price level (such as technology and resources). The long-run Phillips curve is also vertical, reflecting the concept that in the long run, there is no trade-off between inflation and unemployment; the economy operates at the natural rate of unemployment regardless of inflation.

The ________ Curves Are Both Vertical