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:

Tipping

The practice of giving a small amount of money to someone who has provided a service, on top of the basic price.

Political Balance

The concept of maintaining equilibrium among various political forces or interests within a society or institution.

Single-Member Plurality System

An electoral system in which candidates compete for a single representative seat from an electoral district, and the candidate receiving the most votes wins.

Proportional Representation System

An electoral arrangement that translates the number of votes received by political parties into a proportionate number of seats in the legislative body.