On the long-run Phillips curve, the unemployment rate
A) and inflation rate can take any value.
B) can be any value but the inflation rate equals the expected inflation rate.
C) equals the natural unemployment rate but the inflation rate can be any value.
D) equals the natural unemployment rate and the inflation rate equals the expected inflation rate.
E) decreases when the inflation rate increases.

Question

Quizplus · Accepted Answer

In the long run, the Phillips curve is vertical at the natural rate of unemployment, indicating that unemployment is independent of inflation, which can vary.

On the Long-Run Phillips Curve, the Unemployment Rate