An important implication of the long-run Phillips curve is that monetary and demand-side fiscal policies work well in reducing the natural rate of unemployment.

Question

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The long-run Phillips curve suggests that there is no trade-off between inflation and unemployment in the long run, meaning that policies aimed at reducing inflation or unemployment may have only short-term effects and cannot permanently reduce the natural rate of unemployment. Therefore, while monetary and demand-side fiscal policies may be effective in the short run, they may not be able to generate sustained reductions in unemployment in the long run.

An Important Implication of the Long-Run Phillips Curve Is That