The only difference between adaptive and rational expectations is that the theory of adaptive expectations assumes economic agents to be irrational.
a. True
b. False
Indicate whether the statement is true or false
Question 2
If a decrease in prices increases total revenue for a product in the short run, in the long run, it will:
a. Increase total revenue by more.
b. Increase total revenue by less.
c. Decrease total revenue.
d. Either b. or c. could result in the long run.
