Can someone explain to me, the concepts of ADAPTIVE and RATIONAL expectations. In macro economics.?
Q. Can someone explain to me, the concepts of adaptive and rational expectations. In macro economics.?
Asked by spikey - Fri Apr 23 12:03:35 2010 - - 1 Answers - 0 Comments
A. In a very short summary: the original Keynesian economics assumed something called 'money illusion'. This means that individuals, for example in their salary demands, will always base their decisions on nominal values without adjusting their demands with expectations about future inflation levels. This concept was criticized by Friedman who introduced the idea that salary demands will include the expected future inflation rate. The question then arises, how are such expectations formed? Friedman proposed the idea of adaptive expectations which essentially says that current expectations about future inflation rates are the result of the current inflation rate and the expectations in the last period. However, this concept leads to some… [cont.]
Answered by I didn't do it! - Sat Apr 24 02:39:38 2010
Q. Can someone explain to me, the concepts of adaptive and rational expectations. In macro economics.?
Asked by spikey - Fri Apr 23 12:03:35 2010 - - 1 Answers - 0 Comments
A. In a very short summary: the original Keynesian economics assumed something called 'money illusion'. This means that individuals, for example in their salary demands, will always base their decisions on nominal values without adjusting their demands with expectations about future inflation levels. This concept was criticized by Friedman who introduced the idea that salary demands will include the expected future inflation rate. The question then arises, how are such expectations formed? Friedman proposed the idea of adaptive expectations which essentially says that current expectations about future inflation rates are the result of the current inflation rate and the expectations in the last period. However, this concept leads to some… [cont.]
Answered by I didn't do it! - Sat Apr 24 02:39:38 2010
By assuming that agents in the economy develop rational expectations...?
Q. By assuming that agents in the economy develop rational expectations, are you also assuming that they carry a detailed model of the economy in their heads? Which do you think is more plausible, rational or adaptive expectations and why?
Asked by yep yep - Sat Sep 6 20:11:15 2008 - - 1 Answers - 0 Comments
A. The answer to the first question is yes. Because of this, the answer to the second question is: clearly, adaptive expectations is a more plausible assumption. BUT rational expectations provides greater power to models which can be quite useful.
Answered by mrecho - Sat Sep 6 20:25:56 2008
Q. By assuming that agents in the economy develop rational expectations, are you also assuming that they carry a detailed model of the economy in their heads? Which do you think is more plausible, rational or adaptive expectations and why?
Asked by yep yep - Sat Sep 6 20:11:15 2008 - - 1 Answers - 0 Comments
A. The answer to the first question is yes. Because of this, the answer to the second question is: clearly, adaptive expectations is a more plausible assumption. BUT rational expectations provides greater power to models which can be quite useful.
Answered by mrecho - Sat Sep 6 20:25:56 2008
Suppose the macroeconomy is not at a long-run equilibrium position. How long will it take for the economy...?
Q. Suppose the macroeconomy is not at a long-run equilibrium position. How long will it take for the economy to adjust back to the full-employment level of output? A.Probably just a few weeks. B.If people in the economy make decisions based on rational expectations, it may take a very long time. C.If people in the economy make decisions based on adaptive expectations, it may take a very long time. D.The economy will usually adjust quickly, regardless of the way people in the economy make decisions. Thanks.
Asked by Sunday - Sun May 30 23:49:48 2010 - - 2 Answers - 0 Comments
A. The answer is C. It's a dynamic process that can be converge or non-converge.
Answered by Anjaree - Mon May 31 05:37:01 2010
Q. Suppose the macroeconomy is not at a long-run equilibrium position. How long will it take for the economy to adjust back to the full-employment level of output? A.Probably just a few weeks. B.If people in the economy make decisions based on rational expectations, it may take a very long time. C.If people in the economy make decisions based on adaptive expectations, it may take a very long time. D.The economy will usually adjust quickly, regardless of the way people in the economy make decisions. Thanks.
Asked by Sunday - Sun May 30 23:49:48 2010 - - 2 Answers - 0 Comments
A. The answer is C. It's a dynamic process that can be converge or non-converge.
Answered by Anjaree - Mon May 31 05:37:01 2010
Which of the following statement is false?
Q. A. Contractionary monetary and fiscal policies tend to lower unemployment but raise inflation. B. All economists agree that for substantial inflation to continue the money supply must rise. C. Expectations based on what has been in the past are called adaptive expectations. D. High money growth and high inflationary expectations inevitably accompany high inflation rates.
Asked by girliegirl - Sat Mar 8 23:14:20 2008 - - 4 Answers - 0 Comments
A. A, contractionary monetary policy and fiscal policy, both lower the level of GDP that is moving away from the equilibrium, the new output levelis lower than the natural rate (which is the initial point) and that cause increase unemployment level (because at the intital point, which is also the natural rate of unemployment),
Answered by milky - Sun Mar 9 06:17:25 2008
Q. A. Contractionary monetary and fiscal policies tend to lower unemployment but raise inflation. B. All economists agree that for substantial inflation to continue the money supply must rise. C. Expectations based on what has been in the past are called adaptive expectations. D. High money growth and high inflationary expectations inevitably accompany high inflation rates.
Asked by girliegirl - Sat Mar 8 23:14:20 2008 - - 4 Answers - 0 Comments
A. A, contractionary monetary policy and fiscal policy, both lower the level of GDP that is moving away from the equilibrium, the new output levelis lower than the natural rate (which is the initial point) and that cause increase unemployment level (because at the intital point, which is also the natural rate of unemployment),
Answered by milky - Sun Mar 9 06:17:25 2008
Macroeconomics true or false question?
Q. The Phillips curve augmented with adaptive expectations implies that the trade-off between unemployment and inflation exists only in the short run. is this statement true, false or uncertain?
Asked by fgdgdf g - Mon Feb 9 10:10:22 2009 - - 1 Answers - 0 Comments
A. In economics is anything true false or certain?
Answered by Zeff - Mon Feb 9 10:33:38 2009
Q. The Phillips curve augmented with adaptive expectations implies that the trade-off between unemployment and inflation exists only in the short run. is this statement true, false or uncertain?
Asked by fgdgdf g - Mon Feb 9 10:10:22 2009 - - 1 Answers - 0 Comments
A. In economics is anything true false or certain?
Answered by Zeff - Mon Feb 9 10:33:38 2009
Suppose you flipped an honest coin 10 times and heads came up 8 times.?
Q. You are about to toss the coin another 10 times. Using adaptive expectations, how many heads do you expect? Based on rational expectations, how many heads do you expect?
Asked by lane_saugt_hahn_fur_drogen - Tue Mar 27 17:15:24 2007 - - 4 Answers - 0 Comments
A. 5
Answered by Richard - Tue Mar 27 17:22:20 2007
Q. You are about to toss the coin another 10 times. Using adaptive expectations, how many heads do you expect? Based on rational expectations, how many heads do you expect?
Asked by lane_saugt_hahn_fur_drogen - Tue Mar 27 17:15:24 2007 - - 4 Answers - 0 Comments
A. 5
Answered by Richard - Tue Mar 27 17:22:20 2007
Help with Macroeconomics?
Q. The inflation rate for the past several years has been 10%. A. If workers have adaptive expectations, what increase in nominal wages will be necessary if they expect to maintain their purchasing power? Why?
Asked by thetomatothatneverwas - Thu May 7 20:08:26 2009 - - 2 Answers - 0 Comments
A. A 10% increase in nominal wages would be necessary since workers would expect 10% inflation meaning prices would rise by 10% so to maintain their current purchasing power in the market they would need a wage increase equal to the increase in prices
Answered by Rrjhgjh jhgm,bn - Thu May 7 20:20:16 2009
Q. The inflation rate for the past several years has been 10%. A. If workers have adaptive expectations, what increase in nominal wages will be necessary if they expect to maintain their purchasing power? Why?
Asked by thetomatothatneverwas - Thu May 7 20:08:26 2009 - - 2 Answers - 0 Comments
A. A 10% increase in nominal wages would be necessary since workers would expect 10% inflation meaning prices would rise by 10% so to maintain their current purchasing power in the market they would need a wage increase equal to the increase in prices
Answered by Rrjhgjh jhgm,bn - Thu May 7 20:20:16 2009
economics help !!!?
Q. Compare the policy implications of Adaptive Expectations Hypothesis with the Rational Expectations Hypothesis only by Philips curves and AS-AD curves
Asked by jazzed - Wed Jul 9 04:25:52 2008 - - 1 Answers - 0 Comments
A. this website has all the answers Good luck.
Answered by K Yo - Thu Jul 10 23:41:10 2008
Q. Compare the policy implications of Adaptive Expectations Hypothesis with the Rational Expectations Hypothesis only by Philips curves and AS-AD curves
Asked by jazzed - Wed Jul 9 04:25:52 2008 - - 1 Answers - 0 Comments
A. this website has all the answers Good luck.
Answered by K Yo - Thu Jul 10 23:41:10 2008
True/False Questions: Please take my economics survey: T or F .?
Q. True/False Questions: Please write next to the question number either T or F . 1.With a reserve requirement of 25 percent, an injection of $100 million of new excess reserves into the economy could cause the money supply to expand by $400 million. 2.The interest rate charged by a depository institution for all loans is set by the Federal Reserve. 3.A decrease in excess reserves would lower the interest rate on loans. 4.An increase in excess reserves in the economy would encourage spending. 5.Lowering the reserve requirement is a tight money policy. 6.If a bank does not meet its reserve requirement it can borrow from the Fed or from other banks in the Federal Funds market. 7.The prime rate is the rate paid by financial depository… [cont.]
Asked by The China Doll Express..Yeah,ok! - Mon Mar 10 11:12:40 2008 - - 2 Answers - 0 Comments
A. That's too many dang questions at once! I got frustrated and gave up.
Answered by Me - Mon Mar 10 11:19:56 2008
Q. True/False Questions: Please write next to the question number either T or F . 1.With a reserve requirement of 25 percent, an injection of $100 million of new excess reserves into the economy could cause the money supply to expand by $400 million. 2.The interest rate charged by a depository institution for all loans is set by the Federal Reserve. 3.A decrease in excess reserves would lower the interest rate on loans. 4.An increase in excess reserves in the economy would encourage spending. 5.Lowering the reserve requirement is a tight money policy. 6.If a bank does not meet its reserve requirement it can borrow from the Fed or from other banks in the Federal Funds market. 7.The prime rate is the rate paid by financial depository… [cont.]
Asked by The China Doll Express..Yeah,ok! - Mon Mar 10 11:12:40 2008 - - 2 Answers - 0 Comments
A. That's too many dang questions at once! I got frustrated and gave up.
Answered by Me - Mon Mar 10 11:19:56 2008
From Yahoo Answer Search: 'Adaptive expectations'
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