In rational expectations theory,the term "optimal forecast" is essentially synonymous with
A)correct forecast.
B)the correct guess.
C)the actual outcome.
D)the best guess.

Question

Quizplus · Accepted Answer

In rational expectations theory, agents base their decisions on the best guess of the future, which is the optimal forecast. It is not necessarily guaranteed to be correct, but it is the best estimate based on all available information. Therefore, the correct forecast, correct guess and actual outcome may not be the same as the optimal forecast.

In Rational Expectations Theory,the Term "Optimal Forecast" Is Essentially Synonymous