According to Friedman and Phelps, Which of the Following Statements

question 269

Multiple Choice

According to Friedman and Phelps, which of the following statements is a correct characterization of unemployment and inflation in the United States since the 1950s?

• A) A trade-off between inflation and unemployment as pictured in the Phillips curve existed over the entire time period.
• B) A trade-off between inflation and unemployment as pictured in the Phillips curve existed in the 1970s and 1980s, but not over the entire period.
• C) The relationship between inflation and unemployment is very different from the Phillips curve. A positive relationship is evident rather than an inverse relationship.
• D) There is no clear relationship between unemployment and inflation.

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Definitions:

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