During the 1960s, most economists believed that expansionary macro-policy
A) that caused inflation would permanently reduce unemployment.
B) that caused inflation would permanently increase unemployment.
C) could not be utilized to reduce unemployment.
D) did not affect inflation.

Question

Quizplus · Accepted Answer

Most economists in the 1960s believed in the Phillips Curve theory, which showed an inverse relationship between unemployment and inflation. Therefore, they believed that expansionary macro-policy that caused inflation would permanently reduce unemployment.

During the 1960s, Most Economists Believed That Expansionary Macro-Policy