The Hypothesis Suggesting That People Combine the Effects of Past

question 287

Multiple Choice

The hypothesis suggesting that people combine the effects of past policy changes on economic variables with their own judgment about the future effects of current and future economic policy is referred to as the

• A) active expectations hypothesis.
• B) passive expectations hypothesis.
• C) rational expectations hypothesis.
• D) adaptive expectations hypothesis.

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Definitions:

Carotid

Referring to the main arteries in the neck that supply blood to the head and brain.

Radial

Relating to or situated near the radius or forearm; or extending in a direction outward from a common center.

Brachial

Relating to the arm, specifically the upper arm from the shoulder to the elbow.

Calibrating

The process of adjusting and setting the accuracy of a measuring instrument to ensure it meets its specified and intended use.