Adaptive Expectations Assume That Individuals

question 4

Multiple Choice

Adaptive expectations assume that individuals:

• A) base predictions on random events (i.e., animal spirits).
• B) make predictions based on the past behaviour of the economy.
• C) form their predictions of macroeconomic variables randomly.
• D) can accurately predict the future.
• E) use all available information in predicting the future.

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Definitions:

Motion Parallax

A depth cue that results from the observer moving, causing objects closer to move faster across the visual field than objects further away, aiding in depth perception.

Height In Plane

The measure of an object or point's vertical distance from a reference point or base level, typically in aviation or geometry contexts.

Perceptual Constancy

Perceptual constancy refers to the psychological phenomenon where people perceive the size, shape, and color of objects as unchanging even as the images on our retina change.

Linear Perspective

A technique in art and photography that creates the illusion of depth and distance on a flat surface using converging lines.