Rational Expectations Refer to

question 117

Multiple Choice

Rational expectations refer to

• A)the use of all available information in forecasting economic variables.
• B)the use of aggregate supply to forecast unemployment.
• C)the use of opportunity costs to forecast inflation.
• D)disinflation.

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Definitions:

Working Memory

An active system that processes the information in short-term memory.

Central Executive

A component of working memory model that oversees and regulates the flow of information from and to its subsidiary systems.

Baddeley

A reference to Alan Baddeley, a psychologist best known for his work on the model of working memory.

Maintenance Rehearsal

A cognitive process involving the repetition of information to keep it within working memory or to store it in short-term memory.