Which of the following is a true statement?
A)There is a long-run trade-off between inflation and unemployment.
B)There is no trade-off between inflation and unemployment in the long run.
C)The short-run Phillips Curve is horizontal.
D)The long-run Phillips Curve is horizontal.

Question

Quizplus · Accepted Answer

In the long run, the Phillips Curve is vertical, indicating no trade-off between inflation and unemployment. This is because, in the long run, the economy is at its natural rate of unemployment, and inflation does not affect this rate.

Which of the Following Is a True Statement