According to the long-run Phillips curve,in the long run monetary policy influences
A)inflation but not the unemployment rate;this is consistent with classical theory.
B)inflation but not the unemployment rate;this is inconsistent with classical theory.
C)the unemployment rate but not inflation;this is consistent with classical theory.
D)the unemployment rate but not inflation;this is inconsistent with classical theory.

Question

Quizplus · Accepted Answer

According to the long-run Phillips curve, in the long run, monetary policy can only influence the inflation rate, not the unemployment rate. This is consistent with classical theory, which suggests that in the long run, the economy will naturally move towards its potential output and the natural rate of unemployment, regardless of monetary policy.

According to the Long-Run Phillips Curve,in the Long Run Monetary