According to Rational Expectations Theory,forecast Errors of Expectations

question 98

Multiple Choice

According to rational expectations theory,forecast errors of expectations

• A)are more likely to be negative than positive.
• B)are more likely to be positive than negative.
• C)tend to be persistently high or low.
• D)are unpredictable.

---

Definitions:

Production Possibilities

The various combinations of goods and services that can be produced in an economy with a given set of resources and technology.

Absolute Advantage

A situation where a producer can produce more goods using the same amount of resources or less than other producers.

Production Possibilities

A graphical representation of the maximum number and combinations of goods and services that can be produced from a fixed set of resources.

Absolute Advantage

A situation where a country, individual, or firm can produce more of a good or service with the same amount of resources compared to other entities.