Economists Have Focused More Attention on the Formation of Expectations

question 68

Multiple Choice

Economists have focused more attention on the formation of expectations in recent years. This increase in interest can probably best be explained by the recognition that

• A)expectations influence the behavior of participants in the economy and thus have a major impact on economic activity.
• B)expectations influence only a few individuals,have little impact on the overall economy,but can have important effects on a few markets.
• C)expectations influence many individuals,have little impact on the overall economy,but can have distributional effects.
• D)models that ignore expectations have little predictive power,even in the short run.

---

Definitions:

Employee Turnover

The rate at which employees leave a company and are replaced by new hires, considered as an indicator of workplace satisfaction and stability.

Employment Tests

Devices that assess the probable match between applicants and job requirements.

Selection

The identification of candidates from a pool of recruits who best meet job requirements, using tools such as application blanks, tests, and interviews.

Overt Integrity Tests

Pre-employment screening tools designed to assess the honesty or integrity of potential employees through direct questions.