A vertical long-run Phillips curve is consistent with
A)the conclusion of Friedman and Phelps, but it is not consistent with the classical idea of monetary neutrality.
B)the classical idea of monetary neutrality, but it is not consistent with the conclusion of Friedman and Phelps.
C)both the conclusion of Friedman and Phelps and the classical idea of monetary neutrality.
D)neither the conclusion of Friedman and Phelps nor the classical idea of monetary neutrality.

Question

Quizplus · Accepted Answer

The vertical long-run Phillips curve is consistent with both the conclusion of Friedman and Phelps, who argued that in the long run, there is no trade-off between inflation and unemployment, and the classical idea of monetary neutrality, which posits that changes in the money supply only affect nominal variables and not real variables like unemployment in the long run.

A Vertical Long-Run Phillips Curve Is Consistent with