The short-run Phillips curve is ________, while the long-run Phillips curve is vertical at the ________.
A) downward sloping; real wage
B) downward sloping; natural rate of unemployment
C) upward sloping; minimum wage
D) upward sloping; average nominal wage rate
E) horizontal; origin

Question

Quizplus · Accepted Answer

The short-run Phillips curve is downward sloping, indicating an inverse relationship between inflation and unemployment. In the long run, the Phillips curve is vertical at the natural rate of unemployment, suggesting that there is no trade-off between inflation and unemployment in the long run.

The Short-Run Phillips Curve Is ________, While the Long-Run Phillips