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.
c
You might also like to view...
The Celler-Kefauver Act of 1950 amended the:
a. Sherman Antitrust Act. b. Clayton Act. c. Federal Trade Commission Act. d. Robinson-Patman Act.
If the government passes a law requiring buyers of college textbooks to send $5 to the government for every textbook they buy, then
a. the demand curve for textbooks shifts downward by $5. b. buyers of textbooks pay $5 more per textbook than they were paying before the tax. c. sellers of textbooks are unaffected by the tax. d. All of the above are correct.
In a perfectly competitive industry, which of the following is a market signal to resource owners?
A) economic profits B) quality of goods C) the level of exports in the country D) the level of subsidies the industry receives
In a market where negative externalities are associated with consumption and production, the equilibrium will not be efficient because:
A. Too few resources will be allocated towards producing the good B. Firms will shut down until costs are reduced C. Costs of production will, on average, be too high D. Too many resources will be allocated towards producing the good