The long-run Phillips Curve is vertical at:
A)price level.
B)the natural rate of unemployment.
C)every level of real GDP.
D)the rate of maximum taxation.

Question

The long-run Phillips Curve is vertical at:
A)price level. 
B)the natural rate of unemployment. 
C)every level of real GDP. 
D)the rate of maximum taxation.

Quizplus · Accepted Answer

The long-run Phillips Curve depicts the relationship between unemployment and inflation in the long run. It shows that unemployment returns to its natural rate regardless of the inflation rate. This means that in the long run, the economy will tend to stabilize at the natural rate of unemployment, which is determined by structural factors like demographics, technology, and institutions. Therefore, the long-run Phillips Curve is vertical at the natural rate of unemployment.

The Long-Run Phillips Curve Is Vertical At