The actual rate of inflation is equal to the expected rate of inflation along the:
A)downward-sloping Phillips curve.
B)upward-sloping aggregate supply curve.
C)horizontal aggregate supply curve.
D)downward-sloping aggregate demand curve.
E)vertical Phillips curve.

Question

Quizplus · Accepted Answer

The vertical Phillips curve shows that there is no tradeoff between inflation and unemployment in the long run, meaning that the actual rate of inflation will be equal to the expected rate of inflation regardless of the level of unemployment. Therefore, the actual rate of inflation is not determined by any of the other curves listed in the question.

The Actual Rate of Inflation Is Equal to the Expected