According to rational expectations,expectations will only change in the event that ________.
A)wealth changes
B)current income changes
C)permanent income changes
D)unanticipated new information arises

Question

Quizplus · Accepted Answer

Rational expectations theory suggests that people base their expectations on all available information, including past experiences and current economic conditions. Therefore, expectations are not likely to change unless there is new and unanticipated information, as this would alter people's perceptions of the future and influence their decision-making. Changes in wealth, current income, or permanent income may affect individual behavior and choices, but they do not necessarily lead to changes in expectations.

According to Rational Expectations,expectations Will Only Change in the Event