Which of the following is the most correct statement about the relationship between inflation and unemployment?

Question

Quizplus · Accepted Answer

The Phillips curve describes the short-run relationship between inflation and unemployment, but in the long run, it breaks down because there is no trade-off between inflation and unemployment. In the long run, increasing the money supply only leads to higher inflation, while unemployment returns to its natural rate. Therefore, option C is the most correct statement. Options A and B are not completely accurate, and option D is incorrect because the Phillips curve does not hold in the long run.

Which of the Following Is the Most Correct Statement About