A rational expectation is defined as
A) necessarily correct because it is the best available forecast.
B) an incorrect forecast.
C) a correct forecast but it might not be the best available forecast.
D) not necessarily correct but is the best available forecast.

Question

Quizplus · Accepted Answer

A rational expectation is not necessarily correct, but it is the best available forecast given the information and model at the time.

A Rational Expectation Is Defined as