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:

Credentialization

Refers to the increasing demand for formal educational qualifications or credentials for employment or social status.

Meritocracy

A social system in which advancement in society is based on an individual's capabilities and merits rather than on the basis of family, wealth, or social background.

Allocation

The process of distributing resources, goods, or responsibilities among people, organizations, or sectors in a society.

Credentialization

The process by which access to occupations or positions requires increasingly higher levels of education or certification.