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INQUIZITIVE Chapter 18: Monetary Policy e Page(s) 591-593 18.3. What is the Phillips curve? Does each statement about inflation listed below have to do with adaptive expectations theory or rational expectations theory? Drag the correct label to each statement. Drag each item on the left to its matching item on the right. Note that every item may not have a match, while some items may have more than one match. People use all available information. Next year is expected to depend on who wins the upcoming election. rational theory adaptive theory People underestimate inflation when inflation is accelerating. Next year is expected to be like this year.