Monetary Policy in Southland

Multiple Choice

Monetary Policy in Southland
In Southland the Department of Finance is responsible for monetary policy. Southland has had an inflation rate of 25% for many years.
-Refer to Monetary Policy in Southland. Suppose Southland has had the same inflation rate for a long time. Which, if either, of the following ideas imply that the unemployment rate in Southland would be above the natural rate.

A) both the Classical dichotomy and the long-run Phillips curve
B) the Classical dichotomy, but not the long run Phillips curve
C) the long-run Phillips curve, but not the Classical dichotomy
D) neither the long-run Phillips curve nor the Classical dichotomy