In the late 1960s,Milton Friedman and Edmund Phelps argued that
A)the trade-off between inflation and unemployment did not apply in the long run This claim is consistent with monetary neutrality in the long run.
B)the trade-off between inflation and unemployment did not apply in the long run.This claim is inconsistent with monetary neutrality in the long run.
C)the trade-off between inflation and unemployment applied in both the short run and the long run.This claim is consistent with monetary neutrality in the long run.
D)the trade-off between inflation and unemployment applied in both the short run and the long run.This claim is inconsistent with monetary neutrality in the long run.

Question

Quizplus · Accepted Answer

Friedman and Phelps argued that in the long run, the trade-off between inflation and unemployment did not exist. This means that even with increased inflation, there would not be a decrease in unemployment. This claim is consistent with monetary neutrality, which suggests that changes in the money supply only have a temporary effect on the economy in the short run, but not in the long run.

In the Late 1960s,Milton Friedman and Edmund Phelps Argued That