Author Question: The adaptive expectations hypothesis implies that people: a. adjust their expectations quickly to ... (Read 109 times)

rosent76 · **on:** Jun 30, 2018

The adaptive expectations hypothesis implies that people:
a. adjust their expectations quickly to policy changes.
b. expect the next period to be pretty much like the recent past.
c. will always be correct in their forecast for the next period.
d. change their expectations about the future if policy changes.

Question 2

Suppose a market basket of goods and services costs 1,000 in the base year and the consumer price index (CPI) is currently 110 . This indicates the price of the market basket of goods and services is now:
a. 110.
b. 1,000.
c. 1,100.
d. 1,225.