The Rational Expectations Hypothesis Indicates That People

question 58

Multiple Choice

The rational expectations hypothesis indicates that people

• A) pay little attention to policy when forming their expectations about the future.
• B) expect the next period to be pretty much like the recent past, regardless of policy changes.
• C) will always be able to forecast the future accurately.
• D) change their expectations about the future if policy changes.

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Definitions:

Brain Dysfunction

Brain Dysfunction encompasses various conditions where the brain does not function as it should, affecting an individual's cognitive, emotional, or physical abilities.

Schizophrenia

Schizophrenia is a chronic and severe mental disorder that affects how a person thinks, feels, and behaves, often characterized by hallucinations, delusions, and impaired cognitive functions.

Cultural Norms

Shared expectations and rules that guide behavior of people within social groups.

Psychological Abnormality

Behaviour, speech, or thought that impairs the ability of a person to function in a way generally expected of him or her, in the context in which the unusual functioning occurs.