Author Question: According to the theory of adaptive expectations, if the inflation rate has been 4.2 percent for the ... (Read 48 times)

berenicecastro

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According to the theory of adaptive expectations, if the inflation rate has been 4.2 percent for the last ten years, people will expect next year's inflation rate to be:
 a. 4.2 percent.
  b. higher than 4.2 percent.
  c. lower than 4.2 percent.
  d. 0; that is, they will expect no inflation.
  e. 8.4 percent.

Question 2

The quantity of gasoline demanded will respond more to a change in price over three weeks than over three years.
 a. True
  b. False
  Indicate whether the statement is true or false



cswans24

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Answer to Question 1

a

Answer to Question 2

False



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