Friedman and Phelps argued
a. that in the long run, monetary growth did not influence those factors that determine the economy's unemployment rate.
b. that the Phillips curve could be exploited in the long run by using monetary, but not fiscal policy.
c. that the short-run Phillips curve was very steep, but not vertical.
d. that there was neither a short-run nor long-run tradeoff between inflation and unemployment.
a
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If Alberto Reyes increases his work hours when his real wage increases, then
A) the substitution effect of the wage increase outweighs the income effect. B) the income effect of the wage increase outweighs the substitution effect. C) leisure is an inferior good to Alberto. D) the substitution effect of the wage increase is completely offset by the income effect.
Most economists consider the case for jawboning to control inflation is strongest when this policy is used:
a. for a long period of time. b. to combat inflation that is out of control. c. to combat cost-push inflation. d. All of these are true.