Suppose we have the following inflation and expectations dat…
Suppose we have the following inflation and expectations data. Year Expected Inflation Actual Inflation 1 0% 0% 2 0% 2% 3 2% 4% 4 4% 6% In year 5, which of the following would be true between Keynesians (K), monetarists (M) and rational expectations (RE) theorist concerning the expected rate of inflation?
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