The Major Criticism of the View That Expectations Are Formed

question 30

Multiple Choice

The major criticism of the view that expectations are formed adaptively is that ________.

• A) this view ignores the fact that people use more information than just past data to form their expectations
• B) it is easier to model adaptive expectations than it is to model rational expectations
• C) adaptive expectations models have no predictive power
• D) people are irrational and therefore never learn from past mistakes

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Definitions:

Workforce Diversity

The inclusion of individuals of different races, ethnicities, genders, ages, religions, disabilities, and sexual orientations in the workplace.

Globalization

The process of interaction and integration among people, companies, and governments worldwide, often characterized by global economic trade and cultural exchange.

Interdependence

The reliance between two or more entities or groups, often leading to collaborative or cooperative behavior.

Business Competition

The rivalry among companies for market share and profitability, driven by the quest for innovation, quality, and customer satisfaction.