Before Developing Inflation Expectations,Jenny Reads Through All Available Material on Consumer

question 151

Multiple Choice

Before developing inflation expectations,Jenny reads through all available material on consumer price indexes and producer price indexes.Later,she also reads through recent magazines and newspapers to identify factors that could affect the inflation rate in the coming days.Jenny can be said to have ________.

• A) adaptive expectations
• B) rational expectations
• C) marginal expectations
• D) conditional expectations

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Definitions:

Behavioral Science

The study of human and animal behavior through observation and experimentation, applying multidisciplinary principles.

Critical-Thinking Methodology

An approach that involves objective analysis and evaluation of an issue in order to form a judgment.

Bias

A prejudice in favor of or against one thing, person, or group compared with another, usually in a way considered to be unfair.

Observing Behaviors

The act of systematically watching and recording the actions and reactions of individuals or groups in order to gather data about specific conduct.