The long-run Phillips curve is a
A) straight line with a 45° slope showing the long-run relationship between the inflation rate and the expected inflation rate.
B) horizontal line that shows the relationship between inflation and unemployment when the economy is at full employment.
C) vertical line indicating a positive relationship between inflation and unemployment.
D) horizontal line indicating a positive relationship between inflation and unemployment.
E) vertical line that shows the relationship between inflation and unemployment when the economy is at full employment.
Correct Answer:
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