Which of the Following Are Implications of Rational Expectations

question 66

Multiple Choice

Which of the following are implications of rational expectations?

• A)As new information becomes available, market participants should adjust expectations accordingly.
• B)Recent years are weighted more heavily than earlier years.
• C)If there is a change in the way a variable moves, the way in which expectations of the variable formed will also change
• D)both a and c are correct.

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Definitions:

Self-Interest

Actions or considerations primarily aimed at one's own benefits or well-being.

Ethical Decision-Making Approach

describes a process that involves evaluating and choosing among alternatives in a manner consistent with ethical principles and values.

Guiding Principles

Fundamental beliefs or ideals that provide direction and help in decision-making within an organization or individual's life.

Deeply Held Beliefs

Convictions or opinions that are strongly embedded in a person’s or community's identity and guide their actions and judgments.