When Individuals Form Expectations Using Information Efficiently and Without Systematic

question 39

Multiple Choice

When individuals form expectations using information efficiently and without systematic errors, then they

• A)can never be wrong with any of their price expectations
• B)are never surprised by unannounced money supply changes
• C)never supply more labor even if their nominal wage rate increases
• D)have adaptive expectations
• E)have rational expectations

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Definitions:

Big Five

A theory in psychology that identifies five main personality traits: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Emotionally Stable

Refers to individuals who have a consistent emotional state and react to stress and adversity in a calm and rational manner.

Heritability

A measure of how much of the variation in a trait among individuals within a population can be attributed to genetic differences.

Highly Heritable

A term used to describe traits or conditions that have a significant genetic component, indicating that they are largely passed down through families.