The Friedman-Phelps (Natural Rate) Hypothesis Made the Strong Prediction That

Multiple Choice

The Friedman-Phelps (natural rate) hypothesis made the strong prediction that:

A) once inflation gets embedded in people's expectations, unemployment and inflation will have a trade-off.
B) the unemployment and inflation trade-off will not survive if inflation gets embedded in people's expectations.
C) there will always be an unemployment and inflation trade-off.
D) the unemployment and inflation trade-off is a myth.