If people eventually adjust their inflation expectations so that in the long run actual and expected inflation are the same,then policymakers
A)can not exploit a tradeoff between inflation and unemployment in either the short or long run.
B)can exploit a tradeoff between inflation and unemployment in the short run but not in the long run.
C)can exploit a tradeoff between inflation and unemployment in both the short run and the long run.
D)can exploit a tradeoff between inflation and unemployment in the long run,but not the short run.

Question

Quizplus · Accepted Answer

In the short run, there can be a tradeoff between inflation and unemployment, as described by the Phillips Curve. However, in the long run, as people adjust their expectations, this tradeoff disappears, and actual inflation aligns with expected inflation, leading to no long-term tradeoff.

If People Eventually Adjust Their Inflation Expectations So That in the Long