Rational Expectations Forecast Errors Will on Average Be ________ and Therefore

question 83

Multiple Choice

Rational expectations forecast errors will on average be ________ and therefore ________ be predicted ahead of time.

• A) positive; can
• B) positive; cannot
• C) negative; can
• D) zero; cannot

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Definitions:

Net Operating Income

The income generated from normal business operations after deducting operating expenses such as wages and cost of goods sold, excluding income from investments and other non-operational sources.

Variable Costing

An accounting method that only considers variable costs (costs that change with production levels) in product costing and decision-making.

Absorption Costing

A bookkeeping approach that encompasses the total expenses of production, including direct materials, direct labor, along with both variable and fixed overhead costs, into the pricing of a product.

Unit Product Cost

The total cost (both fixed and variable) to produce a unit of product, used for setting prices and analyzing efficiency.