The Argument in Favor of Rational Expectations Is That

question 203

Multiple Choice

The argument in favor of rational expectations is that

• A) people will continue to acquire information as long as the marginal benefit of that information is positive.
• B) individuals have a very good idea of what to expect from the government in terms of monetary policy but not fiscal policy.
• C) it is costless for individuals and firms to form rational expectations.
• D) if expectations were not rational, there would be unexploited profit opportunities available.

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Definitions:

Business Incubators

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A model where multiple parts of an organization share resources or services to improve efficiency, effectiveness, and reduce costs.

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A detailed document that outlines the objectives, strategies, marketing, and financial forecasts of a business.