The position of the long-run Phillips curve is determined by
A) the quantity of money.
B) the natural unemployment rate.
C) the inflation rate.
D) the expected inflation rate.

Question

Quizplus · Accepted Answer

The long-run Phillips curve is vertical at the natural rate of unemployment, indicating that in the long run, there is no trade-off between inflation and unemployment. This position is determined by the natural rate of unemployment, which is influenced by factors such as labor market policies and institutions, rather than by the quantity of money, the current inflation rate, or the expected inflation rate.

The Position of the Long-Run Phillips Curve Is Determined by