When Market Participants Have Rational Expectations

question 37

Multiple Choice

When market participants have rational expectations,

• A)the information they use contains only past experiences.
• B)the information they use contains not only past experiences, but also their expectations for the future.
• C)the information they use contains only their expectations for the future.
• D)their forecasts are always correct.

---

Definitions:

Animal-type Phobia

An intense, irrational fear of animals that can cause significant distress or impairment in social, occupational, or other important areas of functioning.

Social Anxiety Disorder

A chronic mental health condition where social interactions cause irrational anxiety, fear, self-consciousness, and embarrassment.

Agoraphobia

An anxiety disorder that involves an extreme or irrational fear of entering open or crowded places, leaving one's own home, or being in places from which escape might be difficult.

Natural Environment Type Phobia

Anxiety disorders characterized by excessive fear of specific natural environments or situations.