The rational expectations hypothesis means that
A) economic agents can predict the future.
B) economic agents do not make systematic errors.
C) everyone expects everyone else to act rationally.
D) economic agents reason with expectations.
B
You might also like to view...
Inflation at a rate that exceeds 50 percent per month is called
A) megainflation. B) hyperinflation. C) super inflation. D) extreme inflation. E) skyflation.
In the monetarist view, if the money supply has been rising too quickly for years, the resulting inflation can be brought under control by slowing money growth. This will
a. quickly reduce inflation with no side effects. b. quickly reduce inflation with higher unemployment. c. increase unemployment depending upon how quickly the public changes their expected price level. d. slowly reduce inflation with higher unemployment. e. both c and d.