In the late 1960s, Milton Friedman and Edmund Phelps identified a major flaw in how economists were looking at the Phillips curve data. Economists were:
A) ignoring the role that is played by employment expectations.
B) giving too much weight to employment expectations.
C) ignoring the role that is played by inflation expectations.
D) giving too much weight to inflation expectations.

Question

Quizplus · Accepted Answer

Friedman and Phelps argued that economists were ignoring the role that inflation expectations play in the relationship between unemployment and inflation, which led to a reevaluation of the Phillips curve.

In the Late 1960s, Milton Friedman and Edmund Phelps Identified