If the Inflation Rate in 2013 Was 2

question 45

Multiple Choice

If the inflation rate in 2013 was 2.5%,and because of that people expect the inflation rate in 2014 will also be 2.5%,these people are said to have

• A) rational expectations.
• B) expectations of stagflation.
• C) adaptive expectations.
• D) expectations of supply shocks.

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Definitions:

Diet And Exercise

A combined approach of nutritional intake and physical activity designed to improve or maintain health and fitness.

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A scenario where one party takes risks or does not have the motivation to mitigate risk because another party is responsible for the fallout.

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Helmets designed with advanced safety features to provide better protection against injuries.

Moral Hazard

The risk that one party to a transaction has incentives to take undue risks because the costs incurred will not be fully borne by that party.