As world economies recover from the financial crisis in 2008 and 2009, the U.S. economy returns to full employment and expected inflation equals actual inflation,

Question

Quizplus · Accepted Answer

When the economy returns to full employment and expected inflation equals actual inflation, there will be a movement back to the long-run Phillips curve, as there will no longer be any short-run tradeoff between inflation and employment. This means that in the long run, the level of unemployment will be determined by structural factors such as demographics, technology, and labor market institutions, and not by monetary policy.

As World Economies Recover from the Financial Crisis in 2008