Which of the following theories of expectations holds that individuals use all information available in forming expectations?
A. Rational expectations theory
B. Certainty equivalent theory
C. Expected value analysis
D. Adaptive expectations theory
A. Rational expectations theory
You might also like to view...
The long run is a period of time in which
A) all factors of production are variable. B) all factors of production are fixed. C) some but not all factors of production are fixed. D) some but not all factors of production are variable.
If the marginal propensity to consume is 0.5, the income tax rate is 10%, and income rises by $20,000 . by how much will consumption spending increase?
a. $15,000 b. $10,000 c. $5,000 d. $9,000 e. $1,000
If a woman marries her housekeeper, GDP would remain constant
a. True b. False Indicate whether the statement is true or false
If autonomous spending increases, the aggregate expenditure function becomes steeper.
Answer the following statement true (T) or false (F)