Two alternative theories that hypothesize how people form expectations are:
A) adaptive expectations theory and rational expectations theory.
B) perfect expectations theory and adaptive expectations theory.
C) rational expectations theory and perfect expectations theory.
D) realistic expectations theory and perfect expectations theory.
E) adaptive expectations theory and realistic expectations theory.

Question

Quizplus · Accepted Answer

Adaptive expectations theory suggests that people form expectations based on past experiences and the current situation. Rational expectations theory suggests that people use all available information, including past experiences and current conditions, to form expectations. Both theories account for how individuals make predictions about future events or outcomes.

Two Alternative Theories That Hypothesize How People Form Expectations Are