The view that people use all available information, including their past experiences, in forming their expectations and that these expectations impact their behavior is known as the _____ view.
A) adaptive expectations
B) learning curve
C) natural expectations
D) rational expectations

Question

Quizplus · Accepted Answer

The rational expectations view posits that individuals form their expectations about the future based on all available information, including historical data, and that these expectations influence their economic decisions. This contrasts with the adaptive expectations hypothesis, which suggests that people form their expectations based solely on past rates of inflation or other economic indicators, without considering more comprehensive information sets.

The View That People Use All Available Information, Including Their