According to the theory of adaptive expectations, if the ...

[berenicecastro]

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]

Answer to Question 1

a

Answer to Question 2

False