The Lucas Critique Argues That Because the Way People Form

question 79

Multiple Choice

The Lucas critique argues that because the way people form expectations is based ______ on government policies, economists ______ predict the effect of a change in policy without taking changing expectations into account.

• A) partly; cannot
• B) only partly; can
• C) in no way; can
• D) in no way; cannot

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Definitions:

Neurons

Specialized cells in the nervous system that convey information to other neurons, muscles, or glands.

Acetylcholine

A neurotransmitter involved in many functions including muscle movement, heart rate, memory, and learning, playing a key role in the brain and body's nervous systems.

Catecholamines

Organic compounds that act as neurotransmitters or hormones, such as adrenaline and dopamine, involved in bodily responses to stress.

Nervous System

The network of nerve cells and fibers that transmits nerve impulses between parts of the body.