If expectations about inflation are adaptive,they are ________.
A)formed by looking at the future
B)likely to change rapidly
C)based on past inflation
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

Adaptive expectations are based on past inflation rates. They assume that people make predictions about future inflation based on their experiences of past inflation. Therefore, the answer is (C) based on past inflation.

If Expectations About Inflation Are Adaptive,they Are ________