According to the rational expectations hypothesis,an individual's view of future economic performance
A)does not consider past performance.
B)does not consider the impact of inflation.
C)only considers past performance.
D)considers both past performance and current monetary and fiscal policy.

Question

Quizplus · Accepted Answer

According to the rational expectations hypothesis, individuals form their expectations based on both past performance and current monetary and fiscal policy. This suggests that individuals consider a wide range of factors when forming expectations about the future, and do not simply rely on a single variable or piece of information. The hypothesis also assumes that individuals have access to complete and accurate information, and that they use this information in a rational and unbiased manner when forming expectations.

According to the Rational Expectations Hypothesis,an Individual's View of Future