Answer
The benefits of reducing inflation are permanent and the costs temporary since the higher unemployment and lower output are usually minimized in the long run.
In the graph, the economy shifts from point $E$ to point $A$ (since the inflation rate falls and unemployment increases). In the long run, at this level of inflation, the economy shifts from $PC_{SR}$ to $PC_{SR_1}$. The economy then jumps from point $A$ to point $E_1$. Thus, the economy has a lower inflation rate, and the unemployment rate returned to its long run average.
Work Step by Step
The costs of increasing inflation are permanent and the benefits temporary since there will be periods of higher unemployment and lower output.
In the graph, the economy shifts from point $E$ to point $B$ (since the inflation rate falls and unemployment increases). In the long run, at this level of inflation, the economy shifts from $PC_{SR}$ to $PC_{SR_2}$. The economy then jumps from point $B$ to point $E_2$. Thus, the economy has a higher inflation rate, and the unemployment rate returned to its long run average.
