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:

Vessel Elements

Components of the xylem tissue in plants, which are elongated cells that contribute to the conduction of water and minerals.

Xylem

The vascular tissue in plants responsible for the transport of water and nutrients from the roots to the rest of the plant.

Phloem

The vascular tissue in plants responsible for the transport of nutrients such as sugars from the leaves to other parts of the plant.