Rational Expectations Implies

question 24

Multiple Choice

Rational expectations implies

• A) that consumers can be systematically fooled.
• B) that in models with aggregate shocks, consumers and firms always correctly forecast inflation.
• C) that the central bank always foresees what the fiscal authority will do.
• D) that the consumers and firms in models do the best they can in forecasting future economic variables.
• E) that models in which we make this assumption are always right.

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Definitions:

Undifferentiated Cells

Cells that have not yet developed into specialized cell types, retaining the ability to divide and become any type of cell in the organism.

Drosophila

A genus of small fruit flies, often used as model organisms in genetic research.

Arabidopsis

A model organism used in plant research, especially in genetics and molecular biology, known as Arabidopsis thaliana.

Plant Development

The growth and differentiation processes in plants, from germination through maturity, involving cellular, physiological, and structural changes.