Q
The rational-expectation hypothesis suggests that the forecasts that people make concerning future inflation rates ?
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A
A. Consistently overestimate the actual rate of inflation in the future.
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B
B. Are always correct
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C
C. Consistently underestimate the actual rate of inflation in the future
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D
D. Are correct on average, but are subject to errors that are distributed randomly
Correct Answer:
D. D. Are correct on average, but are subject to errors that are distributed randomly
