The long-run Phillips curve shows the relationship between the inflation rate and the unemployment rate when the economy is
A)away from potential GDP.
B)at full inflation.
C)at full employment.
D)in expansion.
E)in recession.

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 when the economy is at full employment.

The Long-Run Phillips Curve Shows the Relationship Between the Inflation