The long-run Phillips curve corresponds to the vertical region of the long-run aggregate supply curve.

Question

Quizplus · Accepted Answer

The long-run Phillips curve represents the relationship between inflation and unemployment in the long run, where the economy has had sufficient time to adjust to changes in the aggregate demand for goods and services. In the long run, the Phillips curve becomes vertical, indicating that there is no stable tradeoff between inflation and unemployment. This corresponds to the vertical region of the long-run aggregate supply curve, which indicates that the economy's output is at its potential level, and changes in the price level do not affect the level of output. Therefore, the answer is A, true.

The Long-Run Phillips Curve Corresponds to the Vertical Region of the Long-Run