Which of the Following Is True About Rational Expectations

question 82

Multiple Choice

Which of the following is true about rational expectations?

• A)People form expectations on the basis of information about past as well as future actions of policy makers.
• B)Wage agreements do not reflect inflationary expectations if workers expect continued inflation.
• C)Rational people cannot easily anticipate the effects of discretionary policy on the price level and output.
• D)The role of expectations is applicable in the context of monetary policy only.
• E)The effectiveness of a particular government policy is independent of people's expectations.

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Definitions:

Social Cohesion

The bonds or glue that hold a society together, encompassing shared values, identities, and norms that facilitate cooperation among different groups.

Collective Conscience

The set of shared beliefs, ideas, and moral attitudes which operate as a unifying force within a society.

Sociology of Religion

The study of the beliefs, practices, and organizational forms of religion using the tools and methods of the discipline of sociology.

Religious Practices

Religious practices are the actions or rituals performed as part of a person's faith or belief system, varying widely among different religions and cultures.