Most Economists Reject the Theory of Rational Expectations Because

question 59

Multiple Choice

Most economists reject the theory of rational expectations because

• A)expectations adjust very quickly.
• B)workers receive wage increases in advance of inflation.
• C)the short-run aggregate supply curve is vertical.
• D)labor contracts tend to embody past inflation rates.

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Definitions:

Observational Learning

Learning that occurs through observing the actions of others and the consequences of those actions, without direct experience.

Classical Conditioning

An acquisition of knowledge process that forms by associating an environmental stimulus with a natural one.

Operant Conditioning

A learning mechanism characterized by the adaptation of behavior strength through the provision of incentives or deterrents.

Latent Learning

A form of learning that occurs without immediate reinforcement and is not demonstrated until there is motivation to do so.