Most Economists Reject the Theory of Rational Expectations Because

question 59

Multiple Choice

Most economists reject the theory of rational expectations because

• A)expectations adjust very quickly.
• B)workers receive wage increases in advance of inflation.
• C)the short-run aggregate supply curve is vertical.
• D)labor contracts tend to embody past inflation rates.

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Definitions:

Demoralizing Military Losses

Military defeats that significantly lower the morale, confidence, and spirit of the affected country or armed forces.

Continental Army

The revolutionary war army authorized by the Continental Congress in 1775, led by General George Washington, that fought against British forces in the American Revolutionary War.

Legally Fight

The act of pursuing justice or resolving disputes through the judicial system, adhering to legal protocols and procedures.

Revolutionary War

The war fought from 1775 to 1783 in which the thirteen American colonies successfully fought for their independence from British rule, leading to the founding of the United States of America.