Compared to adaptive expectations,rational expectations would imply that the transition between the short-run and the long-run will take:

Question

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Rational expectations assume that people have perfect knowledge of the economy and make forecasts based on that knowledge, whereas adaptive expectations assume people use past experiences to make forecasts. Therefore, with rational expectations, people would adjust their expectations quickly based on any new information and the transition between the short-run and long-run would be faster than with adaptive expectations.

Compared to Adaptive Expectations,rational Expectations Would Imply That the Transition