The figure shows inflation expectations and actual inflation for U.S. consumers over time. Which of the following statements correctly describes the relationship between these rates?

A)Actual inflation and inflation expectations seem to behave independently.
B)Actual inflation and inflation expectations are exactly the same over time.
C)Actual inflation tends to follow inflation expectations.
D)Actual inflation and inflation expectations have an inverse relationship.

Question

The figure shows inflation expectations and actual inflation for U.S. consumers over time. Which of the following statements correctly describes the relationship between these rates?

A)Actual inflation and inflation expectations seem to behave independently. 
B)Actual inflation and inflation expectations are exactly the same over time. 
C)Actual inflation tends to follow inflation expectations. 
D)Actual inflation and inflation expectations have an inverse relationship.

Quizplus · Accepted Answer

The Answer of The figure shows inflation expectations and actual inflation for U.S. consumers over time. Which of the following statements correctly describes the relationship between these rates?

A)Actual inflation and inflation expectations seem to behave independently. 
B)Actual inflation and inflation expectations are exactly the same over time. 
C)Actual inflation tends to follow inflation expectations. 
D)Actual inflation and inflation expectations have an inverse relationship.

The Figure Shows Inflation Expectations and Actual Inflation for U