Which of the Following Hypotheses States That People Combine the Effects

question 279

Multiple Choice

Which of the following hypotheses states that people combine the effects of past policy changes on important economic variables with their own judgment about the future effects of future and current policy changes?

• A) policy irrelevance hypothesis
• B) rational expectations hypothesis
• C) life cycle hypothesis
• D) real business cycle hypothesis

---

Definitions:

Semi-Permanent

Describes something not intended to last forever but not as temporary as frequently replaced items, indicating a medium duration of usability.

Loop

A structure, series, or process the end of which is connected to the beginning.

Axial Loading

Load applied along or parallel to the main axis of an object, typically leading to compressive or tensile stress.

Centrifugal Loading

The force exerted outward on a body moving in a circular path around a central point.