What Did Friedman and Phelps Argue About Inflation and Unemployment

question 169

Multiple Choice

What did Friedman and Phelps argue about inflation and unemployment?

• A) that in the long run, monetary growth did not influence those factors that determine the unemployment rate
• B) that the Phillips curve could be exploited in the long run by using monetary, but not fiscal policy
• C) that the short-run Phillips curve was very steep but the long-run curve was very flat
• D) that there was neither a short-run nor long-run tradeoff between inflation and unemployment

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Definitions:

360-Day Year

An accounting concept that simplifies interest calculations by using thirty-day months across a full year.

Commission

A fee paid to an agent or employee for transacting a piece of business or performing a service, typically a percentage of the sale.

360-Day Year

An accounting convention that uses 360 days in a year for calculating interest on loans and other financial instruments.

Commission

A service charge assessed by a broker or agent for providing assistance in the execution of a transaction.