Business, 21.04.2020 15:49 justapointie

What do we know about your process of the formation of expected inflation when theta = 0? A. Regardless of what inflation was last year, you would expect it to be at the long-run average inflation rate this year. B. Last year's inflation rate will influence you to revise your estimates for this year's expected rate. C. Neither last year's inflation rate nor the long-run average inflation rate impact your view on this year's expected rate. D. Last year's inflation rate and the long-run average inflation rate have an equal impact on your view of this year's expected rate. What do we know about your process of the formation of expected inflation when theta = 1? A. Regardless of what inflation was last year, you would expect it to be at the long-run average inflation rate this year. B. Neither last year's inflation rate nor the long-run average inflation rate impact your view on this year's expected rate. C. Last year's inflation rate will be the only input for you to revise your estimates for this year's expected rate regardless of what the long-run average inflation rate is. D. Last year's inflation rate and the long-run average inflation rate have an equal impact on your view of this year's expected rate.

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