If Market Participants Notice That a Variable Behaves Differently Now

question 40

Multiple Choice

If market participants notice that a variable behaves differently now than in the past,then,according to rational expectations theory,we can expect market participants to

• A)change the way they form expectations about future values of the variable.
• B)begin to make systematic mistakes.
• C)no longer pay close attention to movements in this variable.
• D)give up trying to forecast this variable.

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Definitions:

Homosexuality

The sexual attraction or romantic affection towards individuals of the same sex.

Relationship Causes

Factors or circumstances that lead to the formation, maintenance, or dissolution of personal connections between individuals.

Prescription Drugs

Medications that are legally available only with a valid prescription from a licensed healthcare provider.