Traditional macroeconomic models assume that people's expectations of inflation
A) are determined by looking at all the relevant information and forecasting the future inflation rate.
B) will be zero in the future.
C) are set by assuming a continuation of present inflation.
D) are set by merely guessing what the future inflation rate will be.

Question

Quizplus · Accepted Answer

Traditional macroeconomic models assume that people's expectations of inflation are set by assuming a continuation of present inflation.

Traditional Macroeconomic Models Assume That People's Expectations of Inflation