These two flaws came together most dramatically and most profoundly in the famous prediction of Milton Friedman (1968) and Edmund Phelps (1968). According to the unadorned Philips curve, one could achieve and maintain a permanently low level of unemployment merely by tolerating a permanently high level of inflation. In the late 1960s, when the consensus view was still it its heyday, Friedman and Phelps argued form microeconomic principles that this empirical relationship between inflation and unemployment would break down if policy makers tried to exploit it. They reasoned that the equilibrioum, or natural, rate of unemployment should depend on labor supply, labor demand, optimal search time, and other microeconomic considerations, not on the average rate of money growth. Subsequent events proved Friedman and Phelps correct: Inflation rose without a permanent reduction in unemployment.

In the paragraph above:

Item 2 - Inflation and unemployment rose in response to the rise of money supply.