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

Question

Quizplus · Accepted Answer

In the long run, the Phillips curve is vertical, indicating that there is no trade-off between inflation and unemployment. Policymakers can lower inflation without affecting the natural rate of unemployment.

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