What do people base their expected inflation rate upon?
What will be an ideal response?
People's expected inflation rate depends on the recent data about inflation, that is, on their recent experiences with inflation. It also depends on economic principles that help to interpret the data of recent experience. People form a rational expectation of the inflation rate, which is the inflation forecast resulting from using all the relevant data and economic science.
Economics
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We would expect the cross elasticity between tennis racquets and tennis balls to be:
a. negative. b. positive. c. zero. d. one. e. infinite.
Economics
In economic terminology, an inferior good is a good
A) that no one will purchase. B) that doesn't work properly. C) that has no monetary value. D) for which demand increases as income decreases.
Economics