A. consistently overestimate the actual rate of inflation in the future.
B. are always correct
C. consistently underestimate the actual rate of inflation in the future
D. are correct on average, but are subject to errors that are distributed randomly
Related Mcqs:
- Under adjustable pegged exchange rates, if the rate of inflation in the United States exceeds the rate of inflation of its trading partners ?
A. U.S exports tend to rise, and imports tend to fall
B. U.S imports tend to rise, and exports tend to fall
C. U.S foreign exchange reserves tend to rise
D. U.S foreign exchange reserves remain constant - Under managed floating exchange rates if the rate of inflation in the United States is less than the rate of inflation of its trading partners the dollar will likely ?
A. appreciates against foreign currencies
B. depreciates against foreign currencies
C. be officially revalued by the government
D. be officially devalued by the government - The theory of international exchange that holds that exchange rates adjust to offset differences in countries inflation rates in the ?
A. price feedback theory
B. trade feedback theory
C. J-curve theory
D. purchasing power parity theory - Under a system of floating exchange rates relatively low productivity and high inflation rates in the United States results in a (an) ?
A. increase in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar
B. increase in the demand for foreign currency an increase in the supply of foreign currency and a appreciation in the dollar
C. decrease in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar
D. decrease in the demand for foreign currency and increase in the supply of foreign currency and a appreciation in the dollar - Under a system of floating exchange rates relatively high productivity and low inflation rates in the United States results in a (an) ?
A. increase in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar
B. increase in the demand for foreign currency an increase in the supply of foreign currency and a appreciation in the dollar
C. decrease in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar
D. decrease in the demand for foreign currency an increase in the supply of foreign currency and a appreciation in the dollar - The hypothesis that people know the true model of the economy and that they use this model to form their expectations of the future is the ?
A. Rational-expectations hypothesis
B. Passive-expectations hypothesis
C. adaptive expectations hypothesis
D. lagged-expectations hypothesis. - Refer to Exhibit 6.If People in the economy expect inflation to be 6 percent but inflation turn out to be 3 percent the economy is operating at point ?
A. H
B. c
C. d
D. F - Refer to Exhibit 6.If People in the economy expect inflation to be 3 percent and inflation is 3 percent the economy is operating at point ?
A. b
B. I
C. a
D. H - Concerning the hypothesis that there has occurred a long run deterioration in the developing countries terms of trade empirical studies provide ?
A. mixed evidence that does not substantiate the deterioration hypothesis
B. overwhelming support for the deterioration hypothesis
C. overwhelming opposition to the deterioration hypothesis
D. None of the above - When actual inflation exceeds expected inflation ?
A. Unemployment is equal to the natural rate of unemployment
B. People will reduce their expectations of inflation in the future
C. Unemployment is greater than the natural rate of unemployment
D. Unemployment is less than the natural rate of unemployment
