why-is-the-long-run-phillips-curve-limited-in-predicting-short-term-economic-flu

Question

Why is the long run Phillips curve limited in predicting short-term economic fluctuations?

Accepted Answer

It does not consider short-term trade-offs between inflation and unemployment.

Answer

It suggests that inflation has no impact on the economy.

Answer

It predicts that unemployment will always be high.

Answer

It assumes that inflation and unemployment are always directly related.