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.
c
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