If you had to predict the U.S. inflation rate for next year and decided that a good way to make that prediction would be to simply use the average inflation rate over the past 10 years, what would be your prediction for U.S. inflation next year?
A) 1.1%
B) 2.4%
C) 4.0%
D) 5.2%

Question

Quizplus · Accepted Answer

Using the average inflation rate over the past 10 years as a predictor for next year's inflation rate may not be the most accurate method, but it is reasonable to assume that past trends may continue. The average inflation rate over the past 10 years is around 2.4%, which suggests that this may be a reasonable prediction for next year's inflation rate.

If You Had to Predict the U