Backward-looking expectations may reasonably describe actual behavior because
A)changes in inflation rates or price levels are often temporary.
B)changes in inflation rates or price levels are often permanent.
C)the speed of adjustment of prices and wages is difficult to estimate since contract negotiators have perfect information about negotiations in other industries.
D)Both A and C.

Question

Quizplus · Accepted Answer

The Answer of Backward-looking expectations may reasonably describe actual behavior because
A)changes in inflation rates or price levels are often temporary.
B)changes in inflation rates or price levels are often permanent.
C)the speed of adjustment of prices and wages is difficult to estimate since contract negotiators have perfect information about negotiations in other industries.
D)Both A and C.

Backward-Looking Expectations May Reasonably Describe Actual Behavior Because