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Author Question: Under adaptive expectations theory, people persistently: a. underestimate inflation when it is ... (Read 79 times)

sjones

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on: Jun 30, 2018
Under adaptive expectations theory, people persistently:
 a. underestimate inflation when it is slowing down.
  b. overestimate inflation when it is accelerating.
  c. underestimate inflation when it is accelerating.
  d. adapt to the prevailing inflation rate.

Question 2

Which of the following would understate the consumer price index?
 a. Substitution bias.
  b. Deteriorating quality of products.
  c. Improving quality of products.
  d. Law of demand bias.


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jasonq

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Reply #1 on: Jun 30, 2018
Answer to Question 1

c

Answer to Question 2

c


sjones

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Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

AmberC1996

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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