If Firms and Households Form Their Expectations About Inflation by Looking

question 95

Multiple Choice

If firms and households form their expectations about inflation by looking at past inflation,this form of expectations formation is known as ________ expectations.

• A)adaptive
• B)forward-looking
• C)rational
• D)perfect

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Definitions:

Payment For It

This term refers to the act of disbursing money in exchange for goods or services.

Cash Receipts

The collection of money, either in the form of cash or checks, received by a business during its operations.

Receivables Period

The median days a company waits to receive money owed by customers for goods or services delivered on credit.

Payables Period

The payables period is a financial metric that indicates the average time it takes for a company to pay its suppliers and vendors.