The rational expectations hypothesis indicates that people:
a. pay little attention to policy when forming their expectations about the future.
b. expect the next period to be pretty much like the recent past, regardless of policy changes.
c. will always be able to forecast the future accurately.
d. change their expectations about the future if policy changes.
d
You might also like to view...
If a decrease in the price of football tickets increases the total revenue of the athletic department, this is evidence that demand is:
a. price elastic. b. price inelastic. c. unit elastic with respect to price. d. perfectly inelastic.
How might the behavior of professional investment managers prior to the financial crisis of 2007-2009 contributed to the depth of the plunge of corporate and mortgage security prices during the crisis?
What will be an ideal response?