One of the Basic Assumptions of Rational Expectations Theory Is

question 75

Multiple Choice

One of the basic assumptions of rational expectations theory is that:

• A) People can anticipate the future effects of policy changes and the actions they take may offset the effects of economic policy
• B) People are not able to assess the future effects of policy changes, so government can use economic policy effectively
• C) Markets are not very competitive and fail to adjust very quickly to changes in demand and supply
• D) People expect government to solve the major unemployment and inflation problems facing the nation and behave accordingly

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Definitions:

Hormones

Chemical substances released into the blood and having effects on other parts of the body.

Weight Regulation

The process of maintaining a healthy body weight through a balance of energy intake and energy expenditure.

Body Mass Index (BMI)

A numerical value derived from an individual's weight and height, used as a screening tool to categorize underweight, normal weight, overweight, or obesity.

Gender

Socially constructed roles, behaviors, expressions, and identities of girls, women, boys, men, and gender-diverse people.