Question: Which is a key difference between a rational expectations perspective and an adaptive expectations perspective? Rational expectations are developed using historical data, whereas adaptive expectations
Which is a key difference between a rational expectations perspective and an adaptive expectations perspective?
Rational expectations are developed using historical data, whereas adaptive expectations are developed using
real time data.
A rational expectations perspective expects changes to happen very slowly, whereas an adaptive expectations perspective expects changes to happen quickly.
The adaptive expectations perspective assumes individuals have limited access to economic data, whereas the rational expectations perspective assumes that individuals have complete access to economic data.
Government agencies tend to have rational expectations, due to their use of economic specialists, whereas the public at large tends to hold adaptive expectations.
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