Refer to the information provided in Figure 13.6 below to answer the questions that follow. Figure 13.6
-Refer to Figure 13.6. If unemployment is on the x-axis, which panel represents the long-run Phillips curve?

Question

Refer to the information provided in Figure 13.6 below to answer the questions that follow.  Figure 13.6
-Refer to Figure 13.6. If unemployment is on the x-axis, which panel represents the long-run Phillips curve?

Quizplus · Accepted Answer

Panel C represents the long-run Phillips curve, as it is a vertical line indicating that in the long run, there is no trade-off between inflation and unemployment. The other panels show short-run Phillips curves with varying slopes.

Refer to the Information Provided in Figure 13