According to the Adaptive Expectations Hypothesis

question 102

Multiple Choice

According to the adaptive expectations hypothesis,

• A) inflation will cause the long-run unemployment rate to decline.
• B) the economic record during the current period strongly influences decision-maker expectations about the future.
• C) decision makers will consider the expected impact of policy changes when forming their expectations about the future rate of inflation.
• D) future inflation will adapt to conform with the expectations of decision makers.

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Definitions:

Asian

Relating to Asia or its peoples, languages, or cultures.

North American

Pertaining to the continent comprising Canada and the United States, characterized by diverse cultures and landscapes.

Attractiveness

The quality of being appealing or pleasing in appearance or character.

Behavioral Perspective

The behavioral perspective is a way of looking at psychological issues and disorders by focusing on observable behaviors and the ways in which environment influences those behaviors.