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If People Completely Adjust for Any Error in Their Estimation

Question 115

Multiple Choice

If people completely adjust for any error in their estimation of this period's inflation rate,


A) the expected rate of inflation must be higher next period.
B) the expected rate of inflation must be lower next period.
C) the actual rate of inflation will be higher next period.
D) next period's expected inflation will be the same as this period's actual inflation.

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