This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: The rational-expectations hypothesis suggests that the forecasts that people make concerning future ... (Read 86 times)

Mimi

  • Hero Member
  • *****
  • Posts: 542
on: Apr 19, 2019

Question 1

The problem with the traditional macroeconomic treatment of expectations of inflation is that


◦ the model is not consistent with the microeconomic assumption that individuals are rational, forward-looking people.
◦ the model assumes that individuals will merely guess at what the inflation rate will be.
◦ in the model people always assume that inflation will be zero.
◦ the way people formulate expectations in that model assumes that individuals are highly sophisticated in their economic thinking.

Question 2

The rational-expectations hypothesis suggests that the forecasts that people make concerning future inflation rates


◦ are always correct.
◦ consistently overestimate the actual rate of inflation in the future.
◦ are correct on average, but are subject to errors that are distributed randomly.
◦ consistently underestimate the actual rate of inflation in the future.
Principles of Economics ¦ Case, Fair, Oster ¦ 12th Edition
Buy Test-Bank


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by Mimi on Apr 19, 2019

izzat

  • Sr. Member
  • ****
  • Posts: 328
Reply #1 on: Apr 19, 2019
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 29% of students answer this correctly


Mimi

  • Member
  • Posts: 542
Reply 2 on: Apr 19, 2019
Thanks for the timely response, appreciate it

bitingbit

  • Member
  • Posts: 323
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

All adverse reactions are commonly charted in red ink in the patient's record and usually are noted on the front of the chart. Failure to follow correct documentation procedures may result in malpractice lawsuits.

Did you know?

Medication errors are more common among seriously ill patients than with those with minor conditions.

Did you know?

The first documented use of surgical anesthesia in the United States was in Connecticut in 1844.

Did you know?

Long-term mental and physical effects from substance abuse include: paranoia, psychosis, immune deficiencies, and organ damage.

Did you know?

Earwax has antimicrobial properties that reduce the viability of bacteria and fungus in the human ear.

Older people who exercise cognitive skills, like these chess players, retain those skills well into ... Older people who exercise cognitive skills, like these chess players, retain those skills well into ...
How to solve equations containing rational exponents greater than 2 How to solve equations containing rational exponents greater than 2
The level of future emissions is closely linked to the rate of population growth The level of future emissions is closely linked to the rate of population growth
Sensory Crossover Device for Visually Impaired People Sensory Crossover Device for Visually Impaired People
Calico cat illustrates the Lyon hypothesis Calico cat illustrates the Lyon hypothesis
Famous People with Parkinson's Disease Famous People with Parkinson's Disease
Video: Mechanisms of capillary exchange

For a complete list of videos, visit our video library