If you expect that the inflation rate is 5 percent and the inflation actual inflation rate turned out to be exactly 5 percent, then:
A) the inflation rate was fully anticipated and there is no unanticipated inflation.
B) the inflation rate was fully unanticipated.
C) the anticipated inflation rate equals zero.
D) the anticipated and unanticipated inflation rate equals 5 percent.

Question

Quizplus · Accepted Answer

If the expected inflation rate matches the actual inflation rate, this means that all inflation was anticipated and there is no unanticipated inflation. Therefore, choice A is the correct answer.

If You Expect That the Inflation Rate Is 5 Percent