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Economics homework help

Economics homework help. Expectations.
Title of the essay :

  • Why are expectations important for macroeconomics? Discuss the use of rational expectations and adaptive expectations in macroeconomic models .

1500 words you have to add graph where needed to explain it better
Introduction (100 words )

  • What is macroeconomic
  • What are the expectations of macroeconomic
  • What is rational expectation
  • What is adaptive expectations


  • The roles for expectations :
  • Income
  • Wealth
  • Investment,
  • Government
  • central bank policy

In the introduction you explain the main point that the essay will look at .
Main body

  • What is macroeconomic
  • Risk uncertainty and expectation
  • Critically Explain all the roles of expectation :

income, wealth, investment, government and central bank policy.

  • There are a wide range of economic issues that are determined by expectations
  • Business investment is determined by expectations about the economic outlook.
  • Pricing behaviour depends on expected demand and costs.
  • Valuation of securities is based on expected future income.
  • Saving and spending decisions can be influenced by the likelihood of unemployment.


  • Compare in few sentences how Behavioural  Finance treats long-term expectations in the financial markets with the views expressed by Keynes


  • What are the types of expectations of macroeconomic
  • What is rational expectation :it Uses economic model to forecast future periods
  • Muth 1961 theory
  • Controversial theory as it suggest markets will move naturally forwards equilibrium


  • What is adaptive expectations
  • Expect inflation to be same as last period
  • Give a theory that explain it


  • Phillips curve, expectation and inflation explain with graph if needed


  • The three equation models may be presented in full and the steps back to equilibrium will be fully explained.
  1. Comparison of adaptive and rational inflation expectation
  2. Central bank communication and anchoring inflation expectation


  • The lucas critique


  • Expectation hypothesis , inflation basis,and time inconsistency














Economics homework help


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