The Adaptive Expectations Hypothesis Implies That People

question 86

Multiple Choice

The adaptive expectations hypothesis implies that people

• A) adjust their expectations quickly to policy changes.
• B) expect the next period to be pretty much like the recent past.
• C) will always be correct in their forecast for the next period.
• D) change their expectations about the future if policy changes.

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Definitions:

Dissociative Identity Disorder

A severe condition in which two or more distinct identities, or personality states, are present in—and alternately take control of—an individual.

Localized Amnesia

An inability to recall any of the events that occurred over a limited period of time.

Continuous Amnesia

An inability to recall newly occurring events as well as certain past events.

Switching

The act of changing from one state, condition, or activity to another, which can refer to various contexts including psychological states or activities.