Author Question: If the Phillips curve is vertical in the long run, then (Read 44 times)

newbem · **on:** Apr 19, 2019

Question 1

In the long run, the Phillips curve will be vertical at the natural rate of unemployment if

◦ the long-run aggregate demand curve is vertical at potential output.
◦ the long-run aggregate demand curve is horizontal at the natural rate of inflation.
◦ the long-run aggregate supply curve is vertical at potential output.
◦ the long-run supply curve is horizontal at the natural rate of inflation.

Question 2

If the Phillips curve is vertical in the long run, then

◦ there is a trade-off between inflation and unemployment in the long run.
◦ the inflation rate will always be zero in the long run.
◦ the unemployment rate will be zero in the long run.
◦ there is no trade-off between inflation and unemployment in the long run.

frejo · **Reply #1 on:** Apr 19, 2019

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