Q
People are said to have rational expectations if they ?
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A
A. Assume that this yearβs inflation rate will be the same as last yearβs inflation rate
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B
B. Merely guess at the inflation rate.
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C
C. Assume that this yearβs inflation rate will be equal to the average inflation rate over the past 10 years
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D
D. Use all available information in forming their expectations.
Correct Answer:
D. D. Use all available information in forming their expectations.