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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.


Definitions:

Market System

An economic system where decisions regarding investment, production, and distribution are based on supply and demand, with prices determined in free markets.

Self-Interest

An individual's actions and decisions are motivated by their own personal gain or interest, often considered as the driving force behind economic activity.

Competition

is the rivalry among sellers in the same market to attract customers by offering better terms, quality, or services.

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