One of the Primary Assumptions of the Rational Expectations Model

question 197

Multiple Choice

One of the primary assumptions of the rational expectations model is that:

• A) labor and product markets are highly competitive.
• B) people expect others to behave irrationally.
• C) labor markets exhibit short-term stickiness.
• D) prices do not adjust quickly to expansionary policy.

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Definitions:

Balance Of Probabilities

The standard of proof in civil cases, where the case that is more probable to be true is accepted over the other.

Properly Sealed

Ensuring that a container or package is securely closed and tamper-evident, often to maintain freshness or prevent contamination.

Innocent Misrepresentation

A false statement made honestly and without the intention to deceive, leading to a contract or agreement.

Contract Voidable

A contract that is valid but may be declared void at the option of one of the parties to the contract.