If the Fed tries to lower the unemployment rate so it is lower than the natural unemployment rate, In the long run the SRPC _{--------------------}and the LRPC_{--------------------} . A)does not change; does not change B)does not change; shifts rightward C)shifts downward; shifts leftward D)shifts upward; does not change E)shifts downward; does not change

Question

Quizplus · Accepted Answer

In the long run, attempts to lower unemployment below the natural rate can lead to higher inflation, causing the Short-Run Phillips Curve (SRPC) to shift upward. The Long-Run Phillips Curve (LRPC) remains vertical and does not change.

If the Fed Tries to Lower the Unemployment Rate So