Home→ Economics Mcqs → Roots of Modern Macroeconomics →The hypothesis that people know the true model of the economy and that they use this model to form their expectations of the future is the ?

The regarding the new classical macroeconomics is hoe realistic is the assumption ?
It is difficult to determine if the velocity of money is constant over time because ?
The quantity theory of money implies that a given percentage change in the money supply will cause ?
People are said to have rational expectations if they ?
The nation that the government can establish the macroeconomic is known as ?
According of Keynes, the level of employment is determined by ?
According to classical models, the level of employment is determined primarily by ?
The economists who emphasised wage flexibility as a solution for unemployment were ?
A group of modern economists who believe that institutional factors and confidence strongly influence business behaviour and that expanding demand will usually increase output rather than prices are the ?
A group of modern economists who believe that markets clear very rapidly and that expanding the money supply will always increase prices rather than employment are the ?
New classical theories were an attempt to explain ?
If the demand for money depends on the interest rate the velocity of circulation is ?
The persistence of a phenomenon such as unemployment, even then its causes have been removed is called ?
The rational-expectation hypothesis suggests that the forecasts that people make concerning future inflation rates ?
Rapid increase in the price level during periods of recession of high unemployment are known as ?
The government increase government spending to try to reduce unemployment This is an example of ?
Keynesian economics became popular because it was able to explain ?
According to the classical economists the economy ?
Prices that do not always adjust rapidly to maintain equality between quantity supplied and quantity demanded are ?

The hypothesis that people know the true model of the economy and that they use this model to form their expectations of the future is the ?

A. Rational-expectations hypothesis
B. Passive-expectations hypothesis
C. adaptive expectations hypothesis
D. lagged-expectations hypothesis.

Correct Answer: Rational-expectations hypothesis ✔

Last Updated: June 18, 2019