Historical evidence suggests that

Question

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The historical evidence suggests that once policy makers attempted to exploit a short-run Phillips curve trade-off, it disappeared. The Phillips curve showed a negative relationship between unemployment and inflation in the short run, but attempts to exploit this trade-off led to the breakdown of the relationship in the long run. Historical evidence also suggests that the long-run Phillips curve is vertical, meaning that shifts in aggregate supply affect only the price level, not the level of output or employment. Additionally, the relationship between inflation and unemployment is not necessarily a fixed one, as other factors can influence it.

Historical Evidence Suggests That