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3 Cards in this Set
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- Back
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Rational Expectations |
The theory that people form the most accurate possible expectations about the future that they can, using all information available to them. |
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Adaptive Expectations |
The theory that people look at past experience and gradually adapt their beliefs and behavior as circumstances change. |
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Neoclassical Economics |
Argue that in the long run, the economy will adjust back to its potential GDP level of output through flexible price levels. |
