If the long-run Phillips curve is vertical, then any government policy designed to lower:
A)unemployment will not change the unemployment rate and only increase the inflation rate.
B)unemployment will work leaving the inflation rate unchanged.
C)inflation will cause employment to rise.
D)unemployment will work causing the inflation rate to fall.
E)unemployment will work causing inflation to rise.

Question

Quizplus · Accepted Answer

In the long run, the Phillips curve is vertical, indicating that there is no trade-off between inflation and unemployment. Attempts to reduce unemployment below its natural rate will only lead to higher inflation without affecting the unemployment rate.

If the Long-Run Phillips Curve Is Vertical, Then Any Government