Which of the Following Best Characterizes the Theory of Rational

question 130

Multiple Choice

Which of the following best characterizes the theory of rational expectations?

• A)It describes how policymakers react to supply shocks.
• B)It concerns how people use information to predict the future.
• C)It explains why the long run Phillips curve is vertical.
• D)It explains how people act when there is unemployment and workers must be rationed.

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Definitions:

Federal

Relating to the national government of a country, as opposed to local or state government.

Labor Relations

The study and practice of managing unionized employment situations, including negotiations between employers and unions regarding wages, working conditions, and other employment terms.

Labor Unions

Organizations that represent workers in negotiating with employers over wages, working conditions, and rights.

Human Resources

The division of a business that deals with recruiting, hiring, training, and managing employees, focusing on policies and systems to maximize workforce efficiency.