Which of the Following Statements About Expectations Theory Is True

question 123

Multiple Choice

Which of the following statements about expectations theory is true?

• A) Adaptive expectations theory implies that people form expectations on the basis of all available information.
• B) Rational expectations theory implies that people's expectations of future inflation are based on their most recent experiences.
• C) Rational expectations theory does not imply that people always predict inflation correctly.
• D) Adaptive expectations theory identifies prediction errors as random.
• E) Rational expectations theory was developed before adaptive expectations theory.

---

Definitions:

Fun Run

A noncompetitive and recreational running event, usually organized for participants of all ages and abilities, often to support charity or community causes.

Pulmonary Semilunar Valve

A heart valve located between the right ventricle and the pulmonary artery that prevents blood from flowing back into the heart.

Pulmonary Trunk

The major vessel that exits the right ventricle of the heart, carrying deoxygenated blood to the lungs for oxygenation.

Oxygenated Blood

Blood that has been oxygenated by the lungs and is being transported by the arteries to the tissues throughout the body.