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12 April, 10:16

Only the short-run Phillips curve is downward sloping because: a in the long run, prices adjust, eliminating the relationship between inflation and unemployment. b central banks only have influence over the economy in the long run. c central banks have no influence over the economy in the short run. d in the long run, prices are sticky, eliminating the relationship between inflation and unemployment. e long-run effects of monetary policy are negated by fiscal policy.

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  1. 12 April, 10:44
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    a in the long run, prices adjust, eliminating the relationship between inflation and unemployment

    Explanation:

    Philip's curve states that there is an inverse relationship between inflation and unemployment in the short run. However, in the long run, workers and consumers adapt to the new environment.
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