Friedman and Phelps concluded that
a. in the long run the Phillips curve is downward sloping, which is consistent with classical theory.
b. in the long run the Philips curve is downward sloping, which is inconsistent with classical theory.
c. in the long run the Phillips curve is vertical, which is consistent with classical theory.
d. in the long run the Phillips curve is vertical, which is inconsistent with classical theory.
c
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Some U.S. cities still dump raw sewage directly into rivers or oceans
a. True b. False
When price falls in a perfectly competitive industry, each firm will
a. sell more output b. sell the same amount of output but earn less economic profit c. sell less output d. raise its price e. shut down production until price regains its former level
Some economists argue suddenly reducing money supply growth is a costly way to reduce inflation and that it may not work. For example, if a government cuts money growth but makes no real fiscal reforms, people will expect the government will eventually
need to expand the money supply to pay for its expenditures. Thus, the promise to fight inflation will not be credible. Explain why credibility is important to a reduction in the inflation rate.
A market in which businesses, households, and governments buy and sell national currencies is
A) the foreign exchange market. B) the currency exchange market. C) the money exchange market. D) the dollar exchange market.