Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 16, Problem 9QP
To determine
Evidence for rational and adaptive expectations.
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Chapter 16 Solutions
Macroeconomics
Ch. 16.2 - Prob. 1STCh. 16.2 - Prob. 2STCh. 16.2 - Prob. 3STCh. 16.3 - Prob. 1STCh. 16.3 - Prob. 2STCh. 16.3 - Prob. 3STCh. 16.5 - Prob. 1STCh. 16.5 - Prob. 2STCh. 16 - Prob. 1QPCh. 16 - Prob. 2QP
Ch. 16 - Prob. 3QPCh. 16 - Prob. 4QPCh. 16 - Prob. 5QPCh. 16 - Prob. 6QPCh. 16 - Prob. 7QPCh. 16 - Prob. 8QPCh. 16 - Prob. 9QPCh. 16 - Prob. 10QPCh. 16 - Prob. 11QPCh. 16 - Prob. 12QPCh. 16 - Prob. 13QPCh. 16 - Prob. 14QPCh. 16 - Prob. 15QPCh. 16 - Prob. 1WNGCh. 16 - Prob. 2WNGCh. 16 - Prob. 3WNGCh. 16 - Prob. 4WNGCh. 16 - Prob. 5WNG
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- difference between rational expectations and adaptive expectations?arrow_forwardWould it make sense to argue that rational expectations economics is an extreme version of neoclassicaleconomics? Explain.arrow_forwardExplain the term “Rational Expectations” as Thaler used in the first chapter of Misbehaving.arrow_forward
- Suppose wages and prices are flexible, people form their expectations rationally, and they anticipate policy incorrectly.What happens?arrow_forwardThe Figure above shows statistics on Real GDP in Qatar ($billions) from 2012 to 2020, in addition to expectations for the year 2021 and 2022. Real GDP is expected to reach 178 $billions in 2022. What are the main factors that could explain these optimistic expectations?arrow_forwardRational vs Adaptive Expectations. How are they both different from the assumption we have used up to this point? What are the policy implications of one versus the other?arrow_forward
- 1. A. Harold Hotelling forecast that someday the oil industry would come to an end. For the interim period, in between his time and the end of oil, what were Hotelling's expectations for (i) consumers, (ii) oil production investors, and (iii) oil prices? B. Marion King Hubbard forecast that the oil industry would continue to expand, and then shrink. What reasoning did Marion King Hubbert use to form his expectations? C. Contrary to the forecast of Harold Hotelling, today's global oil output is greater than ever. Nevertheless, what have top Middle East oil exporting nations do to apply Hotelling's expectations into their own national oil export policies? D. Also contrary to the beliefs of Marion King Hubbert, today's global oil output is greater than ever, rather than less. Even the USA's oil output is greater today than it was when Hubbert made his forecast. Nevertheless, what have the major oil exporters of the Arabian Gulf done in the past to apply Hubbert's forecasts into their…arrow_forwardIn 2016, when the interest rate on 10-year German government bonds became negative, an article in the Wall Street Journal noted that the interest rate on 10-year bonds depended in part on investors' expectations of future short-term interest rates. The article also noted that "investors don't seem to have changed their perception of... [short-term] interest rates in the future." If the article is correct, can the expectations theory explain why the interest rate on 10-year German government bonds declined? Can the risk premium theory? Briefly explain.arrow_forwardRational expectations theory assumes Multiple Cholce consumer behavior is static. consumers will change their behavior, but it takes time. consumers will adjust to their current situation immediately consumers lack full information and would benefit from improved expectationsarrow_forward
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