Under Rational Expectations, People Use

question 72

Multiple Choice

Under rational expectations, people use:

• A) all the information at their disposal to make their best forecasts of the coming rate of inflation
• B) all past rates of inflation to make their best forecasts of the coming rate of inflation
• C) announcements by the Fed to make their best forecasts of the coming rate of inflation
• D) only the Fed's inflation target to make their best forecasts of the coming rate of inflation
• E) the unemployment rate to make their best forecasts of the coming rate of inflation

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Definitions:

Moral Panic

A widespread feeling of fear, often irrational, that some evil threatens the well-being of society, leading to demands for strong measures to be taken.

Social Control

Refers to the social sanctions by means of which conformity to cultural guidelines is ensured. It refers to the means by which authorities seek to contain collective action, including co-optation, concessions, and coercion.

Rising Levels

Refers to the increase in a specific parameter or measurements over time, such as sea levels, temperatures, or economic indicators.

Crime

An action or omission that constitutes an offense punishable by law.