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According to the rational expectations theory, if the last three years of inflation were 0 percent, 2 percent, and 4 percent, respectively, one would expect

According to the rational expectations theory, if the last three years of inflation were 0 percent, 2 percent, and 4 percent, respectively, one would expect inflation the following year to be

percent.

a) 4

b) 2

c) 0

d) 3

e) 6

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