(I) Rational expectations adherents believe that decision makers base their future expectations on actual outcomes observed during recent periods.
(II) The adaptive expectations hypothesis states that decision makers weigh all available evidence when forming expectations about future economic events.
A) I is true; II is false.
B) I is false; II is true.
C) Both I and II are true.
D) Both I and II are false.

Question

(I)  Rational expectations adherents believe that decision makers base their future expectations on actual outcomes observed during recent periods.
(II)  The adaptive expectations hypothesis states that decision makers weigh all available evidence when forming expectations about future economic events.
A) I is true; II is false.
B) I is false; II is true.
C) Both I and II are true.
D) Both I and II are false.

Quizplus · Accepted Answer

The Answer of (I)  Rational expectations adherents believe that decision makers base their future expectations on actual outcomes observed during recent periods.
(II)  The adaptive expectations hypothesis states that decision makers weigh all available evidence when forming expectations about future economic events.
A) I is true; II is false.
B) I is false; II is true.
C) Both I and II are true.
D) Both I and II are false.

(I) Rational Expectations Adherents Believe That Decision Makers Base Their Future