Which of the Following Best Characterizes the Theory of Rational

question 130

Multiple Choice

Which of the following best characterizes the theory of rational expectations?

• A)It describes how policymakers react to supply shocks.
• B)It concerns how people use information to predict the future.
• C)It explains why the long run Phillips curve is vertical.
• D)It explains how people act when there is unemployment and workers must be rationed.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.