Author Question: The hypothesis that people believe the best indicator of the future is the recent past is known as: ... (Read 108 times)

newyorker26 · **on:** Jun 30, 2018

The hypothesis that people believe the best indicator of the future is the recent past is known as:
a. rational expectations.
b. adaptive expectations.
c. lagged expectations.
d. trend expectations.

Question 2

Suppose the price of banana rises over time and consumers respond by buying fewer bananas. This situation contributes to which bias in the consumer price index?
a. Substitution bias.
b. Transportation bias.
c. Quality bias.
d. Indexing bias.