If People Do NOT Always Make the Same Mistakes When

question 101

Multiple Choice

If people do NOT always make the same mistakes when forecasting the future, then

• A) rational expectations are irrational.
• B) the Fed can control monetary policy and determine real variables such as real GDP.
• C) the policy irrelevance theorem holds.
• D) fiscal policy is more effective than monetary policy at fine-tuning the economy.

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Definitions:

Centration

In Piaget’s theory, the tendency of preoperational children to focus on one aspect of a situation and neglect others.

Socioeconomic Status

A measure of an individual's or family's economic and social position in relation to others, based on income, education, and occupation.

Deferred Imitation

Piaget’s term for reproduction of an observed behavior after the passage of time by calling up a stored symbol of it.

Symbolic Functioning

The ability to use symbols, signs, or objects to represent something else.