Answer
In the long run, there is no actual trade-off between inflation and unemployment, the economy must return to the Natural Rate of Unemployment (NARU). In the short run, the economy moves along the short-run Phillips curve. Inflation over time will cause the economy to come back to the long run which is a shift right of SRPC.
Work Step by Step
This question tests your knowledge of short run and expectations of the long run which adjusts the short run curve and maintains the NARU.
