Which Statement Is NOT an Effective Criticism of Rational Expectations

question 198

Multiple Choice

Which statement is NOT an effective criticism of rational expectations?

• A) Studies have shown that macroeconomic policies do have an impact on the economy.
• B) Labor markets are beset with imperfect information.
• C) Labor markets exhibit short-term wage stickiness.
• D) Errors about future expectations are randomly distributed.

Understand the motivations and incentives that influence politicians and government officials' behavior within the public choice theory framework.

Explain how the principles that predict behavior in the private sector can also be applied to understand behavior in the public sector.

Contrast the efficiency and characteristics of market allocation with those of political processes.

Identify the impact of government actions on economic efficiency and individual welfare.

---

Definitions:

Underpaid

The state of receiving less financial compensation for one's work than is considered reasonable or fair.

Women

Adult female humans, characterized by the possession of two X chromosomes in most cases and typically capable of pregnancy and childbirth.

Valued

Refers to something that is held in high esteem or considered important by individuals or society.

Shortfall

A situation in which something is less than required or expected, often referring to a deficit or inadequacy of resources or quantities.