Which two famous economists hypothesized that people would adapt their expectations about inflation to something consistent with their prior experience?
A) Ben Bernanke and Alan Greenspan
B) Milton Friedman and Edmund Phelps
C) Adam Smith and David Ricardo
D) John Maynard Keynes and F.A.Hayek
E) Irving Fisher and Adam Smith

Question

Quizplus · Accepted Answer

Milton Friedman and Edmund Phelps proposed the idea of adaptive expectations theory in the 1960s, suggesting that people base their expectations about future inflation on their prior experience of inflation. This theory revolutionized the way economists thought about inflation and its relationship with expectations.

Which Two Famous Economists Hypothesized That People Would Adapt Their