The long-run Phillips curve applies when the economy is at full employment, so the long-run Phillips curve is_{--------------------} . A)horizontal B)vertical C)downward sloping D)upward sloping E)unnecessary

Question

Quizplus · Accepted Answer

The long-run Phillips curve is vertical because, in the long run, there is no trade-off between inflation and unemployment; the economy is at its natural rate of unemployment.

The Long-Run Phillips Curve Applies When the Economy Is at Full