There is no trade-off between unemployment and inflation in the long run.

Question

Quizplus · Accepted Answer

This is known as the "Phillips curve" concept, which suggests that there may be a short-run trade-off between unemployment and inflation, but in the long run, the trade-off disappears. This is because inflation expectations adjust to changes in monetary policy, making it difficult to sustainably reduce unemployment by increasing inflation. In the long run, the only way to reduce unemployment is through structural reforms that improve productivity and efficiency in the economy.

There Is No Trade-Off Between Unemployment and Inflation in the Long