If People Do Not Always Make the Same Mistakes When

question 216

Multiple Choice

If people do not always make the same mistakes when forecasting the future, then

• A)rational expectations are irrational.
• B)the Fed can control monetary policy and determine real variables such as real GDP.
• C)the policy irrelevance theorem holds.
• D)fiscal policy is more effective than monetary policy at fine-tuning the economy.

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Definitions:

Nonverbal Indicators

Communications expressed through body movements, facial expressions, gestures, and posture, rather than spoken words.

Facial Expression

The use of facial muscles to convey emotions, intentions, or social information.

Display Rules

Culturally determined guidelines that govern the management and expression of emotions in various social situations.

Emotions

Powerful, largely uncontrollable feelings, accompanied by physiological changes.