Which of the following are NOT included among Gordon's criticisms of Friedman's fooling model?
A)Workers buy many goods on a weekly basis and thus could discover quite quickly that prices had risen.
B)Workers could discover movements in the aggregate price level fairly easily.
C)The model relied on a non-market-clearing explanation of the labor market.
D)Workers would predict higher prices if policies that led to higher prices in the past were used again.

Question

Quizplus · Accepted Answer

Gordon does not criticize the model for relying on a non-market-clearing explanation of the labor market. His criticisms mainly focus on the assumption that workers are unable to distinguish between nominal and real wages and the assumption that they have perfect knowledge of all prices in the economy.

Which of the Following Are NOT Included Among Gordon's Criticisms