The vertical long-run Phillips curve
A) implies that the Fed cannot influence the unemployment rate in the long run.
B) implies that the Fed can influence the unemployment rate in the long run.
C) implies that the Fed can influence both the unemployment rate and the inflation rate in the long run.
D) implies that the Fed can reduce the unemployment rate in the long run only at the expense of higher inflation rate.
E) none of the above.

Question

Quizplus · Accepted Answer

In the long run, the Phillips curve is vertical, indicating that there is no trade-off between inflation and unemployment, and thus the Fed cannot influence the unemployment rate in the long run.

The Vertical Long-Run Phillips Curve