For this question,assume that individuals form expectations of inflation according to the following equation πet = θπt-1.From 1970 on,the value of θ for this equation

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This equation suggests that individuals' expectations of inflation in the current time period (et) are based on past inflation (t-1), with the weight given to past inflation (θ) being the same over time. Empirical evidence shows that over time, individuals became more forward-looking, meaning they increasingly take into account current and expected future economic conditions in forming their inflation expectations. This implies that the weight given to past inflation (θ) would increase over time and approach 1, which is consistent with choice A.

For This Question,assume That Individuals Form Expectations of Inflation According