Suppose the inflation rate has risen 0.5 percent a year for the past three years. Using this experience an individual forecasts a 0.5 percent rise in the coming year's inflation rate. This is an example of:
a. traditional expectations.
b. rational expectations.
c. adaptive expectations.
d. reflective expectations.
e. deductive expectations.
c
You might also like to view...
The total cost of purchasing a car is:
a. the dollar amount paid for it. b. the dollar amount paid for it plus the seller's opportunity cost. c. the dollar amount paid for it plus the buyer's opportunity cost of time spent on buying it. d. the dollar amount paid for it plus the seller's opportunity cost of the time spent on looking for a buyer.
Answer the following statements true (T) or false (F)
1. Special Drawing Rights are issued by the International Monetary Fund and are a principal source of international reserves. 2. The dollar shortage of the 1950's came about because the economies of foreign countries became competitive with the United States. 3. In the 1970's, the value of the U.S. dollar in world financial markets declined significantly. 4. The United States devalued the dollar twice in the 1970's to alleviate the world’s dollar shortage. 5. In the first half of the ', the value of the dollar was allowed to increase sharply to promote U.S. exports.
To avoid the free-rider problem, which of the following goods is best provided by the government and paid for with tax dollars?
A. automobiles B. lighthouses C. bread D. windows
The amount of calendar time associated with the long run
A. varies by industry. B. is less than five years. C. is between one and five years. D. is greater than one year.