Forecasts expect inflation to be 2%. Actual inflation ends up being 1.75%. Holding all else equal, if there is no supply-side change in the economy, these statistics indicate inflation is ____ less than expected.
A)3.75%
B)0.25%
C)1.75%
D)2.0%

Question

Quizplus · Accepted Answer

To calculate the difference, we subtract the actual inflation from the expected inflation: 
2% - 1.75% = 0.25%
Therefore, inflation is 0.25% less than expected. The answer is B.

Forecasts Expect Inflation to Be 2