Unbiased Forward Theory States That the Forward Rate Is an Unbiased

question 2

Short Answer

Unbiased forward theory states that the forward rate is an unbiased predictor of the _____________________.

Recognize the characteristics of a perfectly competitive market, including demand curve elasticity.

Grasp the concept of economic profits and how they approach zero in the long run in competitive markets.

Understand the role and impact of barriers to entry and exit in competitive industries.

Explain how market prices adjust to shocks in supply and demand in competitive industries.

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Definitions:

Reinforcer

A consequence of an action that affects the likelihood of the action being repeated, or not, in the future.

Operant Conditioning

Operant Conditioning is a learning process through which the strength of a behavior is modified by reinforcement or punishment.

Classical Conditioning

A psychological process through which associations between a previously neutral stimulus and a naturally occurring stimulus are learned, leading to a learned response.

Premack Principle

A principle of reinforcement which states that a more probable behavior can reinforce a less probable behavior.