A vertical long-run Phillips curve is consistent with which of the following?
A)the principle of monetary neutrality
B)real world data
C)a natural rate of unemployment that depends on the inflation rate
D)a downward-sloping aggregate demand curve

Question

Quizplus · Accepted Answer

The vertical long-run Phillips curve suggests that there is no trade-off between inflation and unemployment in the long run, consistent with the principle of monetary neutrality, which states that changes in the money supply only affect nominal variables and not real variables like unemployment.

A Vertical Long-Run Phillips Curve Is Consistent with Which of the Following