The Long-Run Phillips Curve

Multiple Choice

The long-run Phillips curve

A) is downward sloping, indicating a tradeoff between unemployment and inflation.
B) shifts to the right when the expected inflation rate increases.
C) shows no tradeoff between inflation and unemployment; that is, any inflation rate in the long run can be consistent with the natural rate of unemployment.
D) is upward sloping, showing that higher rates of unemployment are associated with higher rates of inflation.