Explain What Economists Mean When They Apply the Rationality Assumption

question 295

Essay

Explain what economists mean when they apply the rationality assumption.

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Definitions:

Diathesis

Underlying predispositions to some disease or abnormal condition.

Affective Disorder

A type of psychological disorder that involves mood disturbances, such as depression or bipolar disorder.

Allostatic Load

The physiological wear and tear on the body that results from ongoing adaptive efforts to maintain stability (homeostasis) in response to stressors.

Present Experience

The immediate perception of events happening at the current moment, involving a focus on the here and now.