The Rational Expectations Theory Describes the Assumption That People Are

question 182

Multiple Choice

The rational expectations theory describes the assumption that people are _____, and the adaptive expectations theory describes the assumption that people are _____.

• A) forward-looking; backward-looking
• B) backward-looking; forward-looking
• C) rational; irrational
• D) profit maximizers; loss minimizers

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Definitions:

Standard Deviations

Measures that quantify the amount of variation or dispersion of a set of data values from the mean.

Probability

The determination of how probable an event is, denoted as a number from 0 to 1.

Uniform Density

Uniform density refers to a type of distribution in which every outcome in a range has an equal probability of occurring, often represented in physics and probability theory.

Probability

A quantification of the chance that a specific event happens, represented as a number ranging from 0 to 1.