According to rational expectations theory,forecast errors of expectations
A)are more likely to be negative than positive.
B)are more likely to be positive than negative.
C)tend to be persistently high or low.
D)are unpredictable.

Question

Quizplus · Accepted Answer

According to rational expectations theory, individuals make predictions based on all available information and past experiences. Therefore, forecast errors are unpredictable and cannot be systematically biased towards being either positive or negative.

According to Rational Expectations Theory,forecast Errors of Expectations