The Policy Implication of the Long-Run Phillips Curve Is That

question 27

True/False

The policy implication of the long-run Phillips Curve is that, while stimulative policies may work to
reduce unemployment in the short run, the only effect of such policies in the long run is to raise
inflation.

---

Definitions:

Equity Securities

Financial instruments representing ownership interest in a company, such as stocks, which can yield dividends and capital gains.

Goodwill

An accounting value assigned to the reputation, customer loyalty, or other factors enabling a business to earn higher profits than expected from its assets alone.

Consolidated Balance Sheet

A financial statement showing the aggregated financial position of a parent company and its subsidiaries.

Acquired Company

A company that has been purchased by another entity.