According to the theory of rational expectations, errors in predicting inflation will
A. be biased upward more often than not.
B. be purely random.
C. tend to be biased downward when inflation is rising and tend to be biased upward when inflation is falling.
D. tend to be biased upward when inflation is rising and tend to be biased downward when inflation is falling.
Answer: B
Economics
You might also like to view...
Nonparticipants in the labor force include those who are classified as unemployed
Indicate whether the statement is true or false
Economics
Assume policy makers in a fixed exchange rate regime decide to peg the exchange rate at a higher level. This is called
A) a devaluation. B) a revaluation. C) a depreciation. D) an appreciation.
Economics