In responding to the Phillips curve hypothesis, Friedman argued that a central bank can peg which of the following?
A)the unemployment rate
B)the inflation rate
C)the growth rate of real GDP
D)the real exchange rate

Question

Quizplus · Accepted Answer

Friedman argued that a central bank can peg the inflation rate, but not the unemployment rate or the real exchange rate. The growth rate of real GDP is determined by various factors such as productivity, technology, and labor force, and cannot be controlled by the central bank.

In Responding to the Phillips Curve Hypothesis, Friedman Argued That