Which of the following is true about the short-run Phillips curve?
A) The Fed can only shift the curve in the short run.
B) In the short run,the Fed can shift the curve,but in the long run,the Fed can only move along it.
C) In both the short run and the long run,the Fed can only shift the curve,it can never move along the curve.
D) In both the short run and the long run,the Fed can only move the economy along the curve;it can never shift the curve.
E) In the short run,the Fed can move the economy along the curve,but in the long run,the Fed can only chose which short run Phillips curve to be on.

Question

Quizplus · Accepted Answer

In the short run, the Fed can influence the economy by moving along the Phillips curve through monetary policy, affecting inflation and unemployment. In the long run, the Phillips curve is vertical, and the Fed can choose which short-run curve to be on by influencing expectations.

Which of the Following Is True About the Short-Run Phillips