The Term 'Rational Expectations' Means

question 75

Multiple Choice

The term 'rational expectations' means:

• A) people make full use of all the information available to them in forming expectations about the future
• B) market participants are able to accurately predict changes in future prices
• C) market participants have perfect information
• D) market participants are able to accurately predict changes in future prices and other economic variables

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Definitions:

Just-World Phenomenon

The cognitive bias to believe that the world is just and people get what they deserve, which helps explain the tendency to blame victims.

Blame-The-Victim Phenomenon

A social phenomenon where the victim of a crime or any wrongful act is held entirely or partially responsible for the harm that befell them.

Adultery Prohibitions

Rules or laws that forbid marital infidelity or sexual relations outside one’s marriage.

Instinct

A complex behavior that is rigidly patterned throughout a species and is unlearned.