Which of the following ideas of the rational expectations theory has been absorbed into mainstream macroeconomics?
A) The monetary rule.
B) The idea that "money doesn't matter."
C) The monetary multiplier.
D) The idea that "expectations are important."

Question

Quizplus · Accepted Answer

The idea that "expectations are important" is the key concept of the rational expectations theory that has been absorbed into mainstream macroeconomics. This means that individuals in the economy form their expectations about future economic variables based on all available information, including past economic data and current policy measures. This has important implications for macroeconomic models and policy analysis. The other choices (A, B, and C) are not related to the rational expectations theory.

Which of the Following Ideas of the Rational Expectations Theory