Adaptive Expectations Assumes That Individuals

question 38

Multiple Choice

Adaptive expectations assumes that individuals

• A)can accurately predict the future.
• B)base predictions on random events (i.e., animal spirits).
• C)form their predictions of macroeconomic variables randomly.
• D)use all available information in predicting the future.
• E) none of the above

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Definitions:

Entrepreneurial Firms

Companies that pursue opportunities without regard to the resources they currently control, focusing on innovation and market disruption.

Radical Innovation

A fundamental change that disrupts or creates whole new industries by introducing groundbreaking products, technologies, or processes.

World War II

A global conflict that lasted from 1939 to 1945, involving most of the world’s nations and resulting in significant military and civilian casualties.

Entrepreneurial Transformation

The process by which individuals or businesses evolve to adapt to changing market demands and opportunities innovatively.