Question

g Moving up along the long run Phillips Curve, actual inflation _________________ and expectations of inflation _______________.Group of answer choicesfalls; do not changeremains constant; remain constantdoes not change; riserises; rise

Answer 1

Answer:

rises; rise

Explanation:

The long run Phillips curve is vertical, since the inverse relationship between inflation and unemployment doesn't exist in the long run. I.e. natural rate of unemployment remains the same regardless of the inflation rate.

Since the curve remains at the natural rate of unemployment (x axis), as you move up the inflation rate increases as well as the expectations about inflation.