Which of the Following Is Consistent with the Rational Expectations

question 61

Multiple Choice

Which of the following is consistent with the rational expectations theory?

• A)John is always right on his predictions of stock market prices.
• B)Janice always underestimates inflation rates.
• C)Michael always overestimates the effect of government purchases on GDP during recessions.
• D)Mona is rarely right in her predictions of stock prices,but her errors are random.

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