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Author Question: The primary argument against the rational-expectations assumption is that (Read 119 times)

abarnes

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on: Apr 19, 2019

Question 1

The argument in favor of rational expectations is that


◦ people will continue to acquire information as long as the marginal benefit of that information is positive.
◦ individuals have a very good idea of what to expect from the government in terms of monetary policy but not fiscal policy.
◦ it is costless for individuals and firms to form rational expectations.
◦ if expectations were not rational, there would be unexploited profit opportunities available.

Question 2

The primary argument against the rational-expectations assumption is that


◦ the costs of formulating rational expectations are very low.
◦ it requires households and firms to know too much.
◦ it assumes that unexploited opportunities for profit persist in the economy.
◦ people expect certain outcomes from the government's policy actions.
Principles of Economics ¦ Case, Fair, Oster ¦ 12th Edition
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Marked as best answer by abarnes on Apr 19, 2019

frejo

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Reply #1 on: Apr 19, 2019
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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abarnes

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Reply #2 on: Apr 19, 2019
Excellent


frejo

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Reply #3 on: Apr 19, 2019
Great! Please up vote :D


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