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.

---

Definitions:

Compulsions

Repetitive behaviors (overt actions or cognitive acts) performed in response to an obsession, or according to certain rules or in a stereotyped manner.

Obsessions

Persistent and intrusive thoughts, urges, or images that cause significant anxiety or distress.

Repetitive Behaviours

Actions or rituals repeated in a compulsive or habitual manner, often observed in neurodevelopmental disorders like Autism Spectrum Disorder (ASD).

Cognitive Acts

Mental actions or processes involved in acquiring knowledge and understanding through thought, experience, and the senses, such as perception, reasoning, memory, and judgment.