Which Statement Is NOT an Effective Criticism of Rational Expectations

question 198

Multiple Choice

Which statement is NOT an effective criticism of rational expectations?

• A) Studies have shown that macroeconomic policies do have an impact on the economy.
• B) Labor markets are beset with imperfect information.
• C) Labor markets exhibit short-term wage stickiness.
• D) Errors about future expectations are randomly distributed.

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Definitions:

Financial Ratios

Quantitative measures derived from a company's financial statements used to assess its financial health, performance, and stability.

Liquidity Ratios

Financial metrics used to determine a company's ability to pay off its short-term debts with its liquid assets, critical for assessing financial health.

Asset Management Ratios

Financial metrics that assess how efficiently a company is using its assets to generate revenue, including turnover ratios for receivables, inventory, and assets.

Leverage Ratios

Financial metrics used to assess the degree of debt in a company's capital structure and its ability to meet financial obligations.