According to the adaptive expectations hypothesis, people will
a. anticipate that what has happened in the immediate past will continue.
b. systematically overestimate inflation when inflation is increasing.
c. use all available information, including information on the expected impact of economic policy, when they formulate expectations about economic events.
d. systematically underestimate inflation when inflation is declining.
A
Economics
You might also like to view...
Refer to the figure above. What is the equilibrium quantity of credit when the credit demand curve is CD2 and the credit supply curve is CS1?
A) $40 B) $50 C) $30 D) $20
Economics
Relative to the United States, Europe has
A) higher unemployment. B) slower job growth. C) higher real wage growth. D) A and B. E) all of the above.
Economics