The Lack of a Long-Run Tradeoff Between the Unemployment Rate

question 18

Multiple Choice

The lack of a long-run tradeoff between the unemployment rate and the inflation rate means that

• A)only monetary policy is effective to lower the natural unemployment rate.
• B)the natural unemployment rate cannot change.
• C)only fiscal policy is effective to lower the natural unemployment rate.
• D)an increase in the inflation rate would not bring a reduction in the natural unemployment rate.
• E)only a decrease in the inflation rate would bring a reduction in the natural unemployment rate.