Friedman and Phelps Argued That

question 3

Multiple Choice

Friedman and Phelps argued that

• A)if peoples' inflation expectations were fixed,then an increase in the money supply growth rate could not change output in the short or long run.
• B)if peoples' inflation expectations were fixed,then a decrease in the money supply growth rate could raise output and unemployment in the short run.
• C)any change in unemployment created by making aggregate demand increase more rapidly is temporary because people eventually revise their inflation expectations.
• D)None of the above is correct.

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Definitions:

Breach Of Contract

The failure to fulfill the terms of a contract by one or more parties involved in the contract.

Performing

The act of fulfilling a command, duty, or role as required or agreed.

Commercially Impracticable

This term refers to situations where fulfilling a contractual obligation has become excessively burdensome or impossible due to unforeseen events, making performance “commercially impracticable.”

Foreseeable

The quality of being able to predict or anticipate an event as likely to happen based on available information.