An expectation may fail to be rational if
A) relevant information was not available at the time the forecast is made.
B) relevant information is available but ignored at the time the forecast is made.
C) information changes after the forecast is made.
D) information was available to insiders only.
B
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When aggregate planned expenditure ________ real GDP, there are unplanned ________ in inventories, and firms ________ production, therefore decreasing real GDP
A) exceeds; decreases; decrease B) exceeds; increases; increase C) is less than; increases; decrease D) is less than; increases; increase E) is less than; decreases; decrease
Assume a bank has $200 million of assets with a duration of 2.5, and $190 million of liabilities with a duration of 1.05. The duration gap for this bank is
A) 0.5 year. B) 1 year. C) 1.5 years. D) 2 years.