The long-run Phillips curve shows that in the long run, policymakers can
A) lower inflation without increasing unemployment.
B) lower unemployment if they are willing to accept more inflation forever.
C) choose the unemployment rate but not the inflation rate.
D) lower inflation if they are willing to accept higher unemployment forever.

Question

Quizplus · Accepted Answer

In the long run, the Phillips curve is vertical, meaning that there is no trade-off between inflation and unemployment. Policymakers can lower inflation without increasing unemployment by implementing contractionary monetary or fiscal policy.

The Long-Run Phillips Curve Shows That in the Long Run