The Theory of Rational Expectations,when Applied to Financial Markets,is Known

question 62

Multiple Choice

The theory of rational expectations,when applied to financial markets,is known as

• A)monetarism.
• B)the efficient markets hypothesis.
• C)the theory of strict liability.
• D)the theory of impossibility.

---

Definitions:

Median Voter

A theory which suggests that the outcome of a majority vote is most likely to represent the preferences of the voter who is in the middle of the political spectrum.

Road Repair

The process of fixing and maintaining roads to ensure they are safe and efficient for transportation.

Condorcet Paradox

A scenario in social choice theory where collective preferences can be cyclical, even if the preferences of individual voters are not, leading to the absence of a clear majority opinion.

Transitive Preferences

In decision theory, a preference system where if an individual prefers option A to B and B to C, then they also prefer A to C.