The Long-Run Phillips Curve Is a Vertical Line Because

question 5

Multiple Choice

The long-run Phillips curve is a vertical line because

• A) the unemployment rate decreases when the inflation rate increases.
• B) there is no relationship between the natural unemployment rate and the inflation rate.
• C) the natural unemployment rate only depends on the inflation rate.
• D) real GDP does not depend on the unemployment rate.
• E) in the long run, the natural unemployment rate increases when inflation increases.

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Investor

An individual or entity that commits capital with the expectation of receiving financial returns.

Economic Value

Refers to the value a good or service has in the context of its ability to generate income or utility.

Interest

The cost of borrowing money or the return on investments, usually expressed as a percentage of the amount lent, deposited, or invested.

Interest

A monetary charge for the concession to borrow currency, habitually framed as an annual percentage figure.