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If people have rational expectations they will never make forecasting errors and the economy will always remain at the full-employment level of output Comment on this statement?
Wiki User
∙ 16y ago
The statement is wrong. Rational expectations hypotesis says people do not make errors in a systematic form. People make errors, but are able to correct them instead of repeat them.
Wiki User
∙ 16y ago
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How do you Rational and Adaptive expectations differ?
Adaptive expectations: assumes peoples' behaviour is totally correlated to past behaviour. History is the dominant factor in choice. Rational expectations: assumes people's behaviour is mostly correlated to acquisition and use of any information about the choice at hand. Rationality is the dominant factor in choice.
'Ordinal approach is rational than cardinal approach' critically evaluate this statement?
'Ordinal approach is rational than cardinal approach' This statement is not a properly formed phrase, please ask questions that make sense.
What is the difference between rational expectation and adaptive expectation?
Rational expectation are expectation formed by individuals based on past experience and on their predictions about the effects of present and future policy actions. Adaptive expectations are based only on the past and expected inflation changes slowly. by marowe f.m.
When the federal reserve reduces the money supply what happens to the GDP and price level?
The reduction in the money supply increases the price level, causes deflation, and may increase or decrease the GDP depending on the level of rational expectations.
The efficient market theory requires what?
According to theory, the efficiency market theory requires that the agents involved have rational expectations, and that the population is correct on average; whenever relevant, new information appears, the agents will update their information appropriately.
I am like a rational number Discuss about how well this statement describes you?
I am rational, but not a number. This statement is therefore half correct.
What has the author Laurence Broze written?
Laurence Broze has written: 'Reduced forms of rational expectations models' -- subject(s): Macroeconomics, Mathematical models, Rational expectations (Economic theory)
Are some rational numbers integers?
That's a true statement. Another true statement is: All integers are rational numbers.
What has the author Patrick H McAllister written?
Patrick H. McAllister has written: 'Rational behavior and rational expectations'
What has the author Charles H Whiteman written?
Charles H. Whiteman has written: 'Linear rational expectations models' -- subject(s): Economics, Mathematical models, Rational expectations (Economic theory)
What has the author Enrico Minelli written?
Enrico Minelli has written: 'Rational expectations in games' -- subject(s): Mathematical models, Equilibrium (Economics), Game theory, Rational expectations (Economic theory)
Can the conditional statement be written as a biconditional statement?
No, because the reverse statement may not result in a true statement.(A) If x is an integer then x*x is rational.(B) if x*x is rational then x is an integer.(B) is utter nonsense. x can be any rational number of even a square root of a rational number, for example, sqrt(2/3), and x*x will be rational.
What can be a statement for rational numbers?
Rational numbers represent a tiny part of real numbers.
How do you Rational and Adaptive expectations differ?
Adaptive expectations: assumes peoples' behaviour is totally correlated to past behaviour. History is the dominant factor in choice. Rational expectations: assumes people's behaviour is mostly correlated to acquisition and use of any information about the choice at hand. Rationality is the dominant factor in choice.
What has the author Thomas Lindh written?
Thomas Lindh has written: 'Essays on expectations in economic theory' -- subject(s): Rational expectations (Economic theory)
What has the author David K H Begg written?
David K. H. Begg has written: 'The economics of floating exchange rates' 'The rational expectations revolution in macroeconomics' -- subject(s): Macroeconomics, Rational expectations (Economic theory) 'Financing government expenditure'
'Ordinal approach is rational than cardinal approach' critically evaluate this statement?
'Ordinal approach is rational than cardinal approach' This statement is not a properly formed phrase, please ask questions that make sense.
