The Long-Run Phillips Curve is vertical,suggesting that ________.
A)allowing inflation to rise will not succeed in keeping unemployment low
B)changes in unemployment have no lasting impact on inflation
C)shifts of the short-run Phillips curve impact inflation,but have no effect on unemployment
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

The Long-Run Phillips Curve suggests that allowing inflation to rise will not succeed in keeping unemployment low because in the long run, the economy returns to equilibrium at the natural rate of unemployment, and any short-run changes will only result in temporary deviations from this rate. Therefore, changes in unemployment have no long-lasting impact on inflation, and the short-run Phillips curve can shift due to various factors, but it will not affect the long-run relationship between inflation and unemployment.

The Long-Run Phillips Curve Is Vertical,suggesting That ________