According to the Rational Expectations Theory

question 23

Multiple Choice

According to the rational expectations theory,

• A) on average people have very little idea of what to expect from government policy makers.
• B) people form expectations by focusing only on the private sector.
• C) people do not consider likely government policies when forming expectations.
• D) people form expectations, in part, by considering the probable future effects of changes in government policy.

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Definitions:

Task Difficulty

The level of challenge or effort required to complete a task, varying based on complexity and individual abilities.

Confederates

In psychological research, individuals who appear to be participants but are actually part of the experiment, working under the direction of the researcher.

Social Influence

The process through which the real or implied presence of others can directly or indirectly influence the thoughts, feelings, and behavior of an individual.

Altruism

denotes a selfless act of concern for the well-being of others without expecting any rewards in return.