The Idea That Economic Agents Do Not Make Systematic Errors

question 23

Multiple Choice

The idea that economic agents do not make systematic errors because they use all information efficiently is called the

• A) consistency hypothesis.
• B) rational expectations hypothesis.
• C) information efficiency hypothesis.
• D) principle of maximizing behavior.
• E) adaptive expectation hypothesis.

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Definitions:

Cladodes

Photosynthetic stems found in some plants that resemble leaves, functioning in photosynthesis and sometimes water storage.

Collenchyma

In plants, simple tissue composed of living cells with unevenly thickened walls; provides flexible support.

Pectin

A natural polysaccharide found in fruits, used as a gelling agent in food production.

Parenchyma

A type of plant tissue composed of living cells, usually having only thin primary walls and varying widely by morphology and metabolism.