expectations is the idea that people slowly incorporate new information and adapt to changes they observe in the economy. (Enter one word in the blank.)

expectations is the idea that people do not incorporate new information into their expectations and do not adjust to new information.

Economists have focused more attention on the formation of expectations in recent years.This increase in interest can probably best be explained by the recognition thatA) Expectations influence the behavior of participants in the economy and thus have a majorimpact on economic activity.B) Expectations influence only a few individuals, have little impact on the overall economy,but can have important effects on a few markets.C) Expectations influence many individuals, have little impact on the overall economy, butcan have distributional effects.D) Models that ignore expectations have little predictive power, even in the short run.

The idea that people do not incorporate new information into their expectations is known asMultiple choice question.static expectations.minor expectations.rational expectations.adaptive expectations.

The idea that people assess all the information available to them, immediately update their expectations, and change their behavior as needed is known asMultiple choice question.adaptive expectations.static expectations.minor expectations.rational expectations.

What are some criticisms of the adaptive expectations hypothesis? Group of answer choices People are not able to use all available information to form their expectations People's expectations are not based on forecasts People are too quick to change their expectations in response to new information People's expectations of a variable are affected by other factors beyond past data on that variable