If Expectations Are Rational, the Difference Between the Actual Rate

question 133

True/False

If expectations are rational, the difference between the actual rate of inflation and the expected rate of inflation will be zero.

---

Definitions:

Contribution Margin

The difference between sales revenue and variable costs, indicating the amount available to cover fixed costs and generate profit.

Variable Administrative Expenses

Expenses within the administration sector that fluctuate with the level of business activity, like sales commissions.

Contribution Margin

The amount by which a product's sales price exceeds its variable costs, used to cover fixed costs and generate profit.

Variable Selling Expenses

Costs that fluctuate with the level of sales activity, such as commissions and shipping fees.