According to the Friedman-Phelps analysis, in the long run actual inflation equals expected inflation and unemployment is at its natural rate.

Question

Quizplus · Accepted Answer

The Friedman-Phelps analysis posits that in the long run, the economy will adjust so that actual inflation equals expected inflation, and unemployment will stabilize at its natural rate, which is determined by the structure and dynamics of the labor market, not by inflation.

According to the Friedman-Phelps Analysis, in the Long Run Actual