By about 1973,U.S.policymakers had learned that
A)there is no trade-off between inflation and unemployment in the short run.
B)there is no trade-off between inflation and unemployment in the long run.
C)Friedman's analysis of inflation and unemployment had been correct,and Phelps's analysis of inflation and unemployment had been incorrect.
D)Phelps's analysis of inflation and unemployment had been correct,and Friedman's analysis of inflation and unemployment had been incorrect.

Question

Quizplus · Accepted Answer

By about 1973, U.S. policymakers had learned that there is no trade-off between inflation and unemployment in the long run. This idea was popularized by the work of economists Milton Friedman and Edmund Phelps, and became known as the "natural rate of unemployment" hypothesis. According to this hypothesis, attempts to reduce unemployment below its natural rate would only lead to higher inflation in the long run.

By About 1973,U.S.policymakers Had Learned That