The _________ hypothesis is based on the assumption that the best indicator of the future is what has happened in the past.

Adaptive Hypothesis

A theory suggesting that individuals adjust their expectations based on past experiences and gradually adapt to the reality of market conditions.

Future Indicator

A measurable economic factor that changes before the economy starts to follow a particular pattern or trend, signaling future activities.

Gain insight into the core concepts of rational expectations theory and its critiques.

Verified Answer

Final Answer :

adaptive expectations

Learning Objectives

Gain insight into the core concepts of rational expectations theory and its critiques.