One of the Ideas That Found a Permanent Place in Macroeconomics

question 15

Multiple Choice

One of the ideas that found a permanent place in macroeconomics after Milton Friedman's presidential address to the American Economic Association in 1967 was that

• A) there is not only a temporary tradeoff between inflation and unemployment,but a permanent tradeoff as well.
• B) the tradeoff between unemployment and inflation exists only in the long run,but not in the short run.
• C) people's expectations about economic events affect economic outcomes.
• D) a and b

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Definitions:

Federal Income Tax

A tax levied by the federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Ability-To-Pay Principle

A taxation principle that suggests taxes should be levied according to an individual's or entity's ability to pay, favoring a more equitable distribution of the tax burden.

U.S. Income Tax

A tax imposed by the U.S. government on the income generated by businesses and individuals within its jurisdiction.

FICA Tax

A federal payroll tax in the United States that funds Social Security and Medicare programs.