The Friedman-Phelps Critique of the Phillips Curve Focused on the Observation

Multiple Choice

The Friedman-Phelps critique of the Phillips curve focused on the observation that ________.

A) workers care primarily about nominal wages and therefore higher inflation would induce them to supply more labour
B) workers care primarily about nominal wages and therefore higher inflation would induce them to supply less labour
C) workers care primarily about real wages and therefore higher inflation would induce them to demand higher nominal wages which would result in higher aggregate output
D) workers care primarily about real wages and therefore higher inflation would induce them to demand higher nominal wages which would result in no increase in aggregate output