Match the statement to whether it describes rational expectations or adaptive expectations: A. Decisions are relatively slow to respond to new information about the economy B. If people expect it to rain a lot next month, they will start buying umbrellas today to take advantage of the relatively lower prices 1. Rational expectations 2. Adaptive expectations

Match the statement to whether it describes rational expectations or adaptive expectations: A. Decisions are relatively slow to respond to new information about the economy B. If people expect it to rain a lot next month, they will start buying umbrellas today to take advantage of the relatively lower prices 1. Rational expectations 2. Adaptive expectations

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter16: Expectations Theory And The Economy

Section: Chapter Questions

Problem 3QP

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