Proponents of the Theory of Rational Expectations Contend That

question 128

Multiple Choice

Proponents of the theory of rational expectations contend that:

• A) people make rational forecasts using all existing information.
• B) business cycles are generally caused by shifts in aggregate demand.
• C) full employment is rarely achieved.
• D) stickiness of prices is the primary cause of inflation.

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Definitions:

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A grassroots Republican movement that emerged in 2009 named for the Boston Tea Party of the 1770s. The Tea Party opposed the Obama administration’s sweeping legislative enactments and advocated for a more stringent immigration policy.

Fourteenth Amendment

1868 constitutional amendment that guaranteed rights of citizenship to former slaves, in words similar to those of the Civil Rights Act of 1866.