A Hypothesis That Assumes That People Combine the Effects of Past

question 293

Multiple Choice

A hypothesis that assumes that people combine the effects of past policy changes on economic events and their own judgment about future effects of current and future policy changes is known as

• A)adaptive expectations.
• B)modern expectations.
• C)rational expectations.
• D)active expectations.

---

Definitions:

Returns To Scale

Describes how output changes in response to a proportional change in all input factors used in production.

Production Function

This concept illustrates how varying amounts of input factors affect the level of production output, showcasing how efficiency can be maximized with certain combinations of inputs.

Output

The quantity of goods or services produced in a given time period by a firm, industry, or country.

Production Function

A mathematical model that describes the relationship between input resources and the output of goods or services produced.