In the 1970s, the U.S.economy experienced both inflation and unemployment.This led economists to recognize that
I.stabilization was a much more difficult task than many economists anticipated.
II.the Keynesian doctrine correctly asserts that reducing inflation and unemployment can be addressed by fiscal policies.
III.shifts in aggregate could frustrate policymaking efforts whereas shifts in the short-run
Aggregate were more easily addressed.

Question

Quizplus · Accepted Answer

In the 1970s, the U.S. economy experienced stagflation, which challenged the Keynesian view that fiscal policies could easily address inflation and unemployment. This led to the realization that stabilization was more complex than previously thought.