One economic hypothesis states that people form expectations by combining the effects of past policy changes on important economic variables with their own judgment about the future effects of current and future policy changes, and then react accordingly. This is known as the

A. contrary opinion hypothesis.
B. relevance hypothesis.
C. rational expectations hypothesis.
D. structural hypothesis.


Answer: C

Economics

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Refer to the above figure. Unexpected expansionary monetary policy has caused the aggregate demand curve to shift to AD2. In the long run

A) real GDP will be Y1, and the price level will be above P2. B) real GDP will be between Y1 and Y2, and the price level will be between P1 and P2. C) real GDP will be Y2, and the price level will be P2. D) real GDP will be Y1, and the price level will be P1.

Economics

Refer to Table 8-28. Based on the table above, what is national income for this economy?

A) $1,950 billion B) $2,250 billion C) $2,950 billion D) $3,550 billion

Economics

As the economy nears the end of an expansion, interest rates usually ________ and wages rise more ________ than prices

A) fall; rapidly B) fall; slowly C) rise; slowly D) rise; rapidly

Economics

Internal markets

A) are used to determine a transfer price. B) are common in corporate America. C) are part of a firm's vertical network. D) all of these choices.

Economics