Only the short-run Phillips curve is downward sloping because
A) in the long run,prices adjust,eliminating the relationship between inflation and unemployment.
B) in the long run,prices are sticky,eliminating the relationship between inflation and unemployment.
C) central banks have no influence over the economy in the short run.
D) central banks only have influence over the economy in the long run.
E) long-run effects of monetary policy are negated by fiscal policy.

Question

Quizplus · Accepted Answer

In the long run, prices adjust and become more flexible, thereby eliminating the relationship between inflation and unemployment. This means that the only short-run Phillips curve is downward sloping, as the relationship between inflation and unemployment can exist in the short run when prices are sticky.

Only the Short-Run Phillips Curve Is Downward Sloping Because