The Rational Expectations Hypothesis Is Based on All the Following

question 140

Multiple Choice

The rational expectations hypothesis is based on all the following assumptions EXCEPT

• A) use of judgment about effects of future policy actions.
• B) use of knowledge of effects of past policy actions.
• C) understanding of how the economy operates.
• D) understanding that prices are sticky.

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Definitions:

Computerized Accounting System

Software used to manage and record accounting transactions, improving efficiency and accuracy.

ATM Withdrawals

Transactions where cash is taken out of a bank account using an Automated Teller Machine.

Depositor's Account

An account maintained by a depositor at a financial institution, reflecting the amount of funds deposited.

Uncollectible Check

A check that cannot be processed because the maker’s bank account has insufficient funds or the account is closed.