If the Phillips curve is ________ in the long run, there is no trade-off between inflation and unemployment in the long run.

Question

Quizplus · Accepted Answer

If the Phillips curve is vertical in the long run, it means that there is a natural rate of unemployment, which is the rate of unemployment that exists when the labor market is in equilibrium and there are no cyclical factors affecting it. In the long run, the economy will adjust to this natural rate of unemployment, regardless of the level of inflation. Therefore, there is no trade-off between inflation and unemployment in the long run.

If the Phillips Curve Is ________ in the Long Run