The long-run Phillips curve
A)represents the fact that inflation is consistent with many unemployment rates
B)represents the fact that inflation will not influence unemployment in the long run
C)has a negative slope because the short-run Phillips curve shifts up and to the left
D)shows that expected inflation can never equal actual inflation
E)shows that unemployment is a short run,but not a long run,phenomenon

Question

Quizplus · Accepted Answer

The long-run Phillips curve represents the fact that inflation will not influence unemployment in the long run. This is because in the long run, economic agents adjust their expectations of inflation, leading to changes in wages and prices that cause the short-run Phillips curve to shift up and to the left such that the long-run Phillips curve is vertical at the natural rate of unemployment.

The Long-Run Phillips Curve