Practice mode Aggregate Supply, Unemployment And Inflation

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

Correct answer A. The long-run aggregate supply curve is vertical at potential GDP

Explanation

When the long-run aggregate supply curve is vertical at potential output, unemployment returns to its natural rate whatever the inflation rate, giving a vertical long-run Phillips curve.

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

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

More Aggregate Supply, Unemployment And Inflation questions

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