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Question
Statistics
Posted 4 months ago
In a model of the long-run Phillips curve (LRPC), what is the shape of the Phillips curve and where should it be placed?
Choose 1 answer:
(A) Vertical at the natural rate of unemployment
(B) Horizontal at the natural rate of inflation
(C) Vertical at the current rate of unemployment
DD) Vertical at full employment output
(E) Horizontal at the current rate of inflation
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Answer from Sia
Posted 4 months ago
Solution by Steps
step 1
Identify the shape of the long-run Phillips curve (LRPC). The LRPC is typically vertical
step 2
Determine the placement of the LRPC. It is vertical at the natural rate of unemployment
A
Key Concept
Long-run Phillips curve (LRPC)
Explanation
In the long run, the Phillips curve is vertical at the natural rate of unemployment, indicating that there is no trade-off between inflation and unemployment in the long run
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