According to Friedman and Phelps, No Matter What a Central

question 144

Multiple Choice

According to Friedman and Phelps, no matter what a central bank does to the money supply, what will happen in the long run?

• A) The economy will have a zero inflation rate.
• B) The unemployment rate will tend toward the natural rate of unemployment.
• C) The inflation rate will tend to the natural rate of inflation.
• D) The economy will have a zero unemployment rate.

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Definitions:

Postpositivist Perspective

A philosophical approach that acknowledges the possibility of errors in observation and emphasizes rigorous methodology and evidence.

Absolute Truth

A concept pertaining to an unalterable and permanent fact that remains true across all contexts and times.

Scientific Process

A systematic method of inquiry involving observation, experimentation, hypothesis development, and data analysis to gain understanding of natural phenomena.

Postpositivism Paradigm

A philosophical approach that acknowledges the existence of objective reality but recognizes the limitations of knowledge in understanding it, often associated with scientific inquiry.