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:

Reforming

The process of making changes to something with the intention of improving it.

Top Management Teams

Groups of high-ranking executives responsible for steering an organization's strategy and making crucial decisions.

Day-To-Day Operations

The regular, routine functions and activities required to manage and run an organization or a project.

Life Expectancy

The average period that a person or organism is expected to live based on statistical averages.