Along the long-run Phillips curve the unemployment rate ________ and the inflation rate ________.
A) is equal to the natural unemployment rate; can be any value
B) can be any value; is equal to the natural inflation rate
C) is equal to the natural unemployment rate; is equal to the natural inflation rate
D) can be any value; can be any value
E) None of the above answers is correct.

Question

Quizplus · Accepted Answer

Along the long-run Phillips curve, the unemployment rate is equal to the natural unemployment rate, which is the rate at which the economy operates at full employment. However, the inflation rate can take on any value, depending on various factors such as monetary policy, productivity growth, and supply shocks. Therefore, option A is correct.

Along the Long-Run Phillips Curve the Unemployment Rate ________ and the Inflation