Rational Expectations Theory Is Based on All of the Following

question 154

Multiple Choice

Rational expectations theory is based on all of the following assumptions,except

• A)that individuals and business firms learn through experience to anticipate the consequences of changes in monetary and fiscal policy.
• B)that individuals and business firms act instantaneously to protect their economic interests.
• C)that demand creates its own supply.
• D)that all resource and product markets are purely competitive.

---

Definitions:

Legally Enforceable

A characteristic of contracts or agreements that can be upheld and compelled by law if not voluntarily honored by the parties involved.

NAFTA Labor

relates to labor provisions within the North American Free Trade Agreement aimed at improving working conditions and labor rights in the member countries.

Labor Laws

Regulations governing the legal relations between employers and employees, including wage, work hours, health and safety, and workers' rights.

Compliance

The act of adhering to regulations, standards, or laws instituted by regulatory organizations or governments.