What does the position of the long-run Phillips curve depend on?
A) the natural rate of unemployment
B) the actual rate of unemployment
C) the actual inflation rate
D) the expected inflation rate

Question

Quizplus · Accepted Answer

The position of the long-run Phillips curve depends on the natural rate of unemployment, which is the rate of unemployment when the economy is producing at its potential output level and there is no upward or downward pressure on the inflation rate. The actual rate of unemployment, actual inflation rate, and expected inflation rate can all affect the short-run movements of the Phillips curve, but in the long run, the curve will settle at the natural rate of unemployment.

What Does the Position of the Long-Run Phillips Curve Depend