The Lucas Critique Argues That Because the Way People Form

question 79

Multiple Choice

The Lucas critique argues that because the way people form expectations is based ______ on government policies, economists ______ predict the effect of a change in policy without taking changing expectations into account.

• A) partly; cannot
• B) only partly; can
• C) in no way; can
• D) in no way; cannot

---

Definitions:

Harmful Product

A product that can cause injury, health issues, or detrimental effects to consumers due to its nature, design, or manufacturing.

Disclaimer

A statement that denies responsibility or affiliation with information, goods, or services, or a renouncement of a legal claim.

Liability

A legal obligation or responsibility, often involving financial debts or compensation for losses or damages.

Injured Buyer

Refers to a purchaser who has suffered harm or damage due to misrepresentation, defective goods, or breach of warranty in a transaction, and may seek legal remedy.