Rational Expectations Theory Assumes That

question 235

Multiple Choice

Rational expectations theory assumes that

• A) people behave rationally and that all product and resource prices are flexible both upward and downward.
• B) firms pay above-market wages to elicit work effort.
• C) markets fail to coordinate the actions of households and businesses.
• D) markets are dominated by monopolistic firms.

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Definitions:

Input/Output Activities

Operations in computer programming that involve reading data from an external source or writing data to an external destination.

Unicode Character Set

A computing industry standard designed to consistently represent and handle text expressed in most of the world's writing systems.

Random Access Memory

Random Access Memory (RAM) is a type of computer memory that can be accessed randomly, allowing data to be read and written in nearly the same amount of time irrespective of the memory location.