(I)  Rational Expectations Adherents Believe That Decision Makers Base Their Future

question 132

Multiple Choice

(I)   Rational expectations adherents believe that decision makers base their future expectations on actual outcomes observed during recent periods.
(II)   The adaptive expectations hypothesis states that decision makers weigh all available evidence when forming expectations about future economic events.

• A) I is true; II is false.
• B) I is false; II is true.
• C) Both I and II are true.
• D) Both I and II are false.

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Definitions:

The Meeting

A scheduled gathering of individuals for the purpose of discussion, decision-making, or sharing information.

Standards

Established norms or criteria against which quality or performance is measured.

Numbers

Symbols or words used to represent quantities, allowing for counting, measuring, and calculating.

Exception

A case that does not follow the general rule or is different from what is usually found or expected.