Economists who argue that the AS curve is vertical in the long run at potential GDP also argue that the Phillips curve in the long run is

Question

Quizplus · Accepted Answer

The long-run Phillips curve is vertical at the natural rate of unemployment because in the long run, the economy returns to potential GDP and the unemployment rate returns to the natural rate, which is the rate consistent with a stable inflation rate. Therefore, in the long run, there is no trade-off between inflation and unemployment, and the Phillips curve becomes vertical.

Economists Who Argue That the AS Curve Is Vertical in the Long