Before the 1960s, monetary policy in the United States was strictly based on expectations. adaptive. expansionary. passive. activist.

Before the 1960s, monetary policy in the United States was strictly

based on expectations.

adaptive.

expansionary.

passive.

activist.

According to 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.

4

2

0

3

6