The long-run Phillips curve is ________ curve and, moving along the long-run Phillips curve, an increase in the inflation rate is associated with ________ in the natural unemployment rate.
A) a downward-sloping; a decrease
B) a vertical; no change
C) an upward-sloping; an increase
D) a downward-sloping; no change
E) a horizontal; no change

Question

Quizplus · Accepted Answer

The long-run Phillips curve is vertical, indicating that there is no trade-off between inflation and unemployment in the long run. This means that an increase in the inflation rate does not change the natural rate of unemployment.

The Long-Run Phillips Curve Is ________ Curve And, Moving Along