In the late 1960s,economist Edmund Phelps published a paper that
A)argued that there was no long-run tradeoff between inflation and unemployment.
B)disproved Friedman's claim that monetary policy was effective in controlling inflation.
C)showed the optimal point on the Phillips curve was at an unemployment rate of 5 percent and an inflation rate of 2 percent.
D)argued that the Phillips curve was stable and that it would not shift.

Question

Quizplus · Accepted Answer

Phelps' paper challenged the prevailing belief at the time that there was a stable tradeoff between inflation and unemployment, known as the Phillips curve. He argued that in the long run, there was no such tradeoff and that attempts to reduce unemployment below its natural rate would only lead to higher inflation. This idea became known as the "natural rate of unemployment" and had important implications for economic policy.

In the Late 1960s,economist Edmund Phelps Published a Paper That