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Assume Adaptive Expectations

Question 99

Multiple Choice

Assume adaptive expectations.Compared to a simple one-period lag,if the last five periods' inflation rates are averaged to arrive at currently expected inflation,we have ________ disinflationary loops and ________ recessions accompanying disinflationary policy


A) skinnier,milder
B) skinnier,deeper
C) fatter,milder
D) fatter,deeper

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