Question 1
The new classical macroeconomists believe that people should form expectations by
◦ actually seeking to forecast the future.
◦ assuming that the future will be like the past.
◦ assuming that the future will be like the present.
◦ overlooking information that allows them to make more accurate forecasts.
Question 2
The microeconomic view of the expectations of inflation are based on the assumption that
◦ individuals are rational, forward-looking people.
◦ individuals will merely guess at what the inflation rate will be.
◦ people always assume that inflation will be zero.
◦ individuals are highly sophisticated in their economic thinking.