The short-run Phillips curve intersects the long-run Phillips curve at the
A) natural interest rate.
B) nominal interest rate.
C) natural inflation rate.
D) expected inflation rate.

Question

Quizplus · Accepted Answer

The short-run Phillips curve intersects the long-run Phillips curve at the expected inflation rate. This intersection point represents the inflation rate that economic agents anticipate, and in the long run, the actual inflation rate adjusts to match this expectation, rendering the unemployment rate equal to its natural rate regardless of inflation.

The Short-Run Phillips Curve Intersects the Long-Run Phillips Curve at the