If the long-run Phillips curve shifts to the right, the economy will have _____ for any given rate of money growth and inflation.

Question

Quizplus · Accepted Answer

If the long-run Phillips curve shifts to the right, it means that there is a higher natural rate of unemployment for any given rate of money growth and inflation. This implies that achieving lower unemployment would require higher inflation, which would lead to lower output. Therefore, the correct choice is C, which means that the economy will have higher unemployment and lower output.

If the Long-Run Phillips Curve Shifts to the Right, the Economy