The historical record suggests that

Question

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The historical record suggests that once policy makers attempted to exploit a short-run Phillips curve trade-off, it disappeared. This phenomenon is known as the breakdown of the Phillips curve. In the long run, the inflation rate is determined by the growth rate of the money supply and is independent of the unemployment rate. Thus, shifts in long-run aggregate supply can affect real output but not the inflation rate. Finally, the relationship between inflation and unemployment is not fixed and can vary depending on various factors such as supply shocks, changes in expectations, and structural changes in the economy.

The Historical Record Suggests That