If inflation was 3 percent last year and 2 percent this year, an individual who follows extrapolative expectations would predict that the inflation rate for the coming year would be:

According to Taylor's rule, all of the following variables help explain the behavior of the federal funds rate EXCEPT

A) output gap. B) current inflation. C) inflation gap. D) yield curve.

If a currency decreases in value as a result of government decree rather than market forces, the process is known as

a. devaluation. b. depreciation. c. deflation. d. degeneration.