According to the Adaptive Expectations Hypothesis, People Will

question 141

Multiple Choice

According to the adaptive expectations hypothesis, people will

• A) anticipate that what has happened in the immediate past will continue.
• B) systematically overestimate inflation when inflation is increasing.
• C) use all available information, including information on the expected impact of economic policy, when they formulate expectations about economic events.
• D) systematically underestimate inflation when inflation is declining.

---

Definitions:

Choreographed Dance

involves the design and execution of a series of movements and steps, often set to music, created and arranged by a choreographer.

Implicit Memory

A type of long-term memory that enables us to perform tasks without conscious awareness of these previous experiences.

Sensory Receptor

A specialized cell or structure that responds to environmental stimuli such as light, sound, or temperature, and converts them into neural signals.

Deep Pressure

A tactile sensory input that involves firm, steady pressure applied to the body to help reduce stress and anxiety.