The rational expectations view that expectations regarding policy and its effects are important to consider
A) serves as the primary rationale for the Laffer Curve.
B) is now accepted by most mainstream economists.
C) is consistent with the monetary rule calling for a constant rate of growth in the money supply.
D) is challenged by research indicating that expectations have little economic effect.

Question

Quizplus · Accepted Answer

The rational expectations view is now accepted by most mainstream economists as an important factor to consider in economic analysis. It suggests that individuals form expectations based on all available information, including their understanding of how policy will affect the economy, and that these expectations can have significant economic effects.

The Rational Expectations View That Expectations Regarding Policy and Its