The long-run Phillips curve indicates that the consequences of trying to reduce unemployment below its natural rate would be:
A)an ever-rising rate of unemployment.
B)an inflation rate equal to zero.
C)a very high uncontrollable rate of inflation.
D)a very low rate of inflation.
E)a natural rate of unemployment equal to zero.

Question

Quizplus · Accepted Answer

The long-run Phillips curve suggests that there is no tradeoff between inflation and unemployment in the long-run, and that attempts to reduce unemployment below its natural rate would only lead to a higher level of inflation that becomes uncontrollable.

The Long-Run Phillips Curve Indicates That the Consequences of Trying