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

Question

Quizplus · Accepted Answer

When the economy is at full employment, the long-run Phillips curve is vertical, indicating that there is no trade-off between inflation and unemployment.

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