A Prediction Based on Rational Expectations ________

question 78

Multiple Choice

A prediction based on rational expectations ________.

• A)relies solely on past experience
• B)will always be superior to one based on adaptive expectations
• C)is based on real,rather than nominal variables
• D)will not always be accurate

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Definitions:

Adjusting Events

Events after the balance sheet date that provide further evidence of conditions that existed at the end of the reporting period, requiring adjustments to financial statements.

Non-Adjusting Events

Events after the reporting period that do not provide new information about conditions existing at the end of the reporting period.

AASB 108

The Australian Accounting Standards Board standard outlining the procedures for making accounting policy changes, correcting errors, and making estimates.