Which of the following statements about the long-run Phillips curve is CORRECT?
A) The long-run Phillips curve is horizontal.
B) The long-run Phillips curve shifts leftward if the natural unemployment rate decreases.
C) The long-run Phillips curve shifts rightward and upward if the expected inflation rate increases.
D) The long-run Phillips curve shifts leftward if the natural unemployment rate increases.

Question

Quizplus · Accepted Answer

The long-run Phillips curve is vertical at the natural rate of unemployment. It shifts leftward if the natural unemployment rate decreases, indicating a lower natural rate of unemployment.

Which of the Following Statements About the Long-Run Phillips Curve