The long-run Phillips curve is a ________ curve, and moving along the long-run Phillips curve an increase in the inflation rate is associated with ________ in the natural unemployment rate.
A) vertical; no change
B) downward sloping; a decrease
C) upward sloping; an increase
D) horizontal; no change
E) downward sloping; no change

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. A movement along the long-run Phillips curve does not result in any change in the natural rate of unemployment.

The Long-Run Phillips Curve Is a ________ Curve, and Moving