One of the Basic Assumptions of Rational Expectations Theory Is

question 44

Multiple Choice

One of the basic assumptions of rational expectations theory is that

• A) people can anticipate the future effects of policy changes and the actions they take may offset the effects of economic policy.
• B) people are not able to assess the future effects of policy changes, so government can use economic policy effectively.
• C) markets are not very competitive and fail to adjust quickly to changes in demand and supply.
• D) people expect government to solve the major unemployment and inflation problems facing the nation and behave accordingly.

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Definitions:

Protein Modifications

Chemical changes that occur to proteins post-synthesis, altering their function and activity.

Regulation of Transcription

The control of gene expression at the DNA transcription stage, determining when and how genes are activated.

mRNA Processing

Various modifications that mRNA undergoes, which may include splicing, capping, and polyadenylation, after it is transcribed from DNA and before it is translated into a protein.

mRNA Transport

The process of moving mRNA molecules from the nucleus where they are synthesized to the cytoplasm where they undergo translation to produce proteins.