A forecast that is based on all the relevant information available is
A)usually accurate.
B)usually no better than a random guess given that the future bears many uncertainties.
C)useful only in the prediction of cost- push inflation.
D)called a rational expectation.
E)useful only in the prediction of demand- pull inflation.

Question

Quizplus · Accepted Answer

A forecast that is based on all the relevant information available is called a rational expectation. While the future does carry uncertainties, a rational expectation is still the most accurate forecast that can be made based on all available information.

A Forecast That Is Based on All the Relevant Information