Adaptive Expectations Theory

question 45

Multiple Choice

Adaptive expectations theory

• A) holds that people form expectations on the basis of all available information.
• B) holds that people's expectations of future inflation are based on their most recent experiences.
• C) explains why prices are flexible in the long run.
• D) holds that people form expectations perfectly.
• E) explains the relationship between the unemployment rate and inflation.

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Definitions:

Flexible Work Schedules

Work arrangements that allow employees to vary their starting and ending times, and work hours, promoting work-life balance.

Flexible Benefit Packages

An employee benefits plan that allows employees to choose from a range of benefit options to customize a package that best meets their needs and preferences.

Child Care

A service involving supervision and care of young children or babies, provided by someone other than the child's legal guardians.

Health Insurance

A type of insurance coverage that pays for medical and surgical expenses incurred by the insured or provides reimbursement for such expenses.