The Pattern of Employment and Inflation Observed During the 1970s

question 6

Multiple Choice

The pattern of employment and inflation observed during the 1970s appeared to confirm the view of Phelps and Friedman that

• A) the Phillips curve was upward sloping, not downward sloping as first thought.
• B) there was no trade-off between inflation and unemployment in the long run.
• C) the expected trade-offs did not occur, meaning that policy to lower unemployment rates would not cause inflation.
• D) the aggregate supply curve actually sloped downward because price levels fell when real GDP rose.

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Definitions:

Independent Premises

Refers to arguments where each premise supports the conclusion on its own.

Diagram

A simplified drawing or chart that shows the structure or explains the operation of something, often used in educational and technical contexts.

Arrows

Symbols used to indicate direction, represent logical relations, or signify movement from one position to another.

Independent Premise

An assertion in an argument that stands alone and does not require support from another premise to be understood or validated.