If people assume that future rates of inflation will ________,they are said to have adaptive expectations.

Question

Quizplus · Accepted Answer

Adaptive expectations assume that future rates of inflation will follow the pattern of inflation rates in the past. This means that people use their past experiences to predict future inflation rates. They base their expectations on the recent trends in inflation and assume that inflation will continue to follow a similar pattern in the future. Therefore, option B is correct. Options A, C, and D are incorrect.

If People Assume That Future Rates of Inflation Will ________,They