In the long run ________.
A)the aggregate supply is vertical with respect to output
B)the Phillips curve is vertical with respect to unemployment
C)fluctuations in the inflation rate have no impact on output and unemployment
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

In the long run, the aggregate supply is indeed vertical with respect to output, indicating that the economy's output is determined by factors such as technology and resources rather than the price level. The Phillips curve, which illustrates the inverse relationship between unemployment and inflation, is also vertical in the long run, suggesting that there is no trade-off between inflation and unemployment in the long term. Lastly, fluctuations in the inflation rate do not impact output and unemployment in the long run, as the economy adjusts to these changes through wage and price adjustments.

In the Long Run ________