Asked by Kaleigh LaPierre on Jun 06, 2024
Verified
The _____ hypothesis is based on the assumption that the best indicator of the future is what has happened in the past.
A) adaptive expectations
B) rational expectations
C) monetary
D) supply-side
Adaptive Expectations
A theory assuming people form their expectations about the future based on past experiences and adjust them as new information becomes available.
Rational Expectations
A theory suggesting that individuals form future expectations based on all available information, including predictions about monetary and fiscal policies.
Monetary
Relating to money or currency, especially the management of money supply and interest rates by a government.
- Understand the principles of adaptive and rational expectations theory.
Verified Answer
Learning Objectives
- Understand the principles of adaptive and rational expectations theory.
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