What Did Milton Friedman and E

question 146

Multiple Choice

What did Milton Friedman and E.S. Phelps argue with respect to the Phillips Curve?

• A) The Phillips Curve could accurately guide activist policy makers over the long run.
• B) The inverse relationship between unemployment and inflation only holds in the long run. In the short run, unemployment and inflation are positively related.
• C) Economic participants would soon understand activist policymakers' strategy and revise their expectations, making discretionary efforts to fine-tune the economy ineffective.
• D) The inflation rate will consistently be 2 percentage points below the unemployment rate.