Author Question: A rational expectation of the inflation rate is A) always correct. B) a forecast based on the ... (Read 42 times)

daltonest1984 · **on:** Jun 29, 2018

A rational expectation of the inflation rate is

A) always correct.
B) a forecast based on the forecasted actions of the Fed and other relevant determinant factors.
C) a forecast based only on the historical evolution of inflation over the last 100 years.
D) an expected inflation rate between 5 percent and 10 percent.
E) an expected inflation rate between 1 percent and 5 percent.

Question 2

Kyle and Stan are playing Odds or Evens, where Kyle is designated as the odd player and Stan is designated as the even player. They decide to play the game 10 times. Kyle's ideal mixture is to

A) shoot 1 every time since he is the odd player.
B) shoot 2 every time since Stan is the even player.
C) shoot 1 50 of the time and shoot 2 50 of the time.
D) Kyle's ideal mixture depends on Stan's ideal mixture.