The long-run Phillips curve corresponds to the vertical region of the aggregate supply curve.

Question

Quizplus · Accepted Answer

The long-run Phillips curve is vertical, indicating that there is no trade-off between inflation and unemployment in the long run. The vertical portion of the aggregate supply curve also represents the long-run equilibrium level of output, where input prices have fully adjusted to changes in the price level. Therefore, the statement is true.

The Long-Run Phillips Curve Corresponds to the Vertical Region of the Aggregate