According to the rational expectations theory
A. anticipation of inflation can cause deflation.
B. anticipation of inflation actually causes inflation.
C. inflation rates are unrelated to unemployment rates.
D. the economic understanding of workers and managers is incomplete, making it unlikely that their inflationary expectations will influence the economy.
B. anticipation of inflation actually causes inflation.
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Current research suggests that countries that adopt a pegged exchange rate may be more vulnerable to an exchange rate crisis
Indicate whether the statement is true or false
When the Fed decreases the money stock, the money supply curve shifts to the ________ and the interest rate ________, everything else held constant
A) right; rises B) right; falls C) left; falls D) left; rises
What impact did colonial inflation have on the colonial economy?
(a) An overall increase in private consumption spending in colonial America (b) A decrease in interest rates in colonial America (c) A decrease in colonial exports and a rise in colonial imports (d) An increase in the exchange rates between colonial money and specie
Indirectly, overvalued exchange rates in Latin America caused
A) a capital shortage in agriculture. B) a capital shortage in industry. C) a capital abundance in agriculture. D) an increase in competitive pressures faced by industry.