According to the Rational Expectations Theory, if the market expects more government borrowing, rates will rise.

Name: According to the Rational Expectations Theory, if the market expects more government borrowing, rates will rise.
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Rational Expectations Theory suggests that if market participants anticipate an increase in government borrowing, they will expect future interest rates to rise due to the higher demand for funds, leading to an immediate increase in current interest rates.

According to the Rational Expectations Theory, If the Market Expects