How would a decrease in the natural rate of unemployment affect the long-run Phillips curve?
A)It would shift the long-run Phillips curve right.
B)It would shift the long-run Phillips curve left.
C)There would be an upward movement along a given long-run Phillips curve.
D)There would be a downward movement along a given long-run Philips curve.

Question

Quizplus · Accepted Answer

The long-run Phillips curve is vertical at the natural rate of unemployment. A decrease in the natural rate of unemployment would shift the long-run Phillips curve to the left, as it represents a lower level of unemployment at which inflation does not accelerate or decelerate.

How Would a Decrease in the Natural Rate of Unemployment