According to the Rational Expectations School, How Do People Form

question 96

Multiple Choice

According to the rational expectations school, how do people form expectations?  

• A) On average, people who form expectations have very little idea of what to expect from government policymakers. 
• B) People form expectations by focusing only on the private sector. 
• C) People do NOT consider the likely government policies when forming expectations, thus they choose to remain rationally ignorant. 
• D) People form expectations, in part, by considering the probable future actions of government policymakers.

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Definitions:

Thoracic Cavity

Space within the thoracic walls, bounded below by the diaphragm and above by the neck.

Pleural Pressure

The pressure within the pleural cavity, which can become negative relative to atmospheric pressure during inhalation, aiding lung expansion.

Atmospheric Pressure

The pressure exerted by the weight of the atmosphere, which at sea level is approximately 101.3 kilopascals (760 mmHg).

Respiratory Membrane

Membrane in the lungs across which gas exchange occurs with blood.