Milton Friedman and Edmund Phelps contributed which insight(s)to Phillips curve analysis?
A)that firms and workers care about nominal,not real wages
B)that wages have a one-to-one relationship with inflation
C)that,in the long run,the level of unemployment is independent of inflation
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

Milton Friedman and Edmund Phelps are known for their insight that, in the long run, the level of unemployment is independent of inflation. This challenged the original Phillips curve concept, which suggested a stable, inverse relationship between unemployment and inflation. They introduced the concept of the natural rate of unemployment, arguing that the economy tends towards this level of unemployment regardless of inflation in the long run.

Milton Friedman and Edmund Phelps Contributed Which Insight(s)to Phillips Curve