The position of the long-run Phillips curve depends on what?

Question

Quizplus · Accepted Answer

The long-run Phillips curve is vertical at the natural rate of unemployment, indicating that in the long run, there is no trade-off between inflation and unemployment. The position of this curve depends on the natural rate of unemployment, which is determined by structural factors such as demographics, technology, and institutional factors. Therefore, A is the correct answer, as the other options (B, C, and D) are all short-run factors that do not affect the long-run Phillips curve's position.

The Position of the Long-Run Phillips Curve Depends on What