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 wage changes have a one-to-one relationship with changes in expected inflation
C)that,in the long run,prices are flexible,so unemployment cannot remain above zero
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

Friedman and Phelps introduced the concept of the expectations-augmented Phillips curve, highlighting that wage changes are influenced by expected inflation, not just actual inflation.

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