Anticipations about inflation and how the economy should perform that are formed by households and businesses from past experiences are:
A) adaptive expectations.
B) hindsighted expectations.
C) policy-review expectations.
D) experience-adjustment expectations.

Question

Quizplus · Accepted Answer

Adaptive expectations are anticipations about inflation and economic performance that are based on past experiences. This concept suggests that individuals and businesses form their expectations for the future based on what has happened in the past, adjusting their outlook as new information becomes available.

Anticipations About Inflation and How the Economy Should Perform That