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.

---

Definitions:

Psychological Disorders

Patterns of behavior, thought, or emotion considered to be pathological (abnormal or disordered) for which individuals may seek therapy.

Preventive Mental Health

Approaches and practices aimed at preventing the onset of mental health problems and illnesses.

Social Situations

Scenarios or environments involving interaction between individuals, often requiring social skills and communication.

Preventive Mental Health

Strategies and practices aimed at preventing mental health problems before they start.