Which of the following ideas of the rational expectations theory has been absorbed into mainstream macroeconomics?
A) the monetary rule
B) the idea that "money doesn't matter"
C) the monetary multiplier
D) the idea that "expectations are important"

Question

Quizplus · Accepted Answer

The idea that "expectations are important" has been absorbed into mainstream macroeconomics through the concept of rational expectations. Rational expectations assume that economic agents form expectations based on all available information, including past events and current policies, and that these expectations are unbiased and efficient. This assumption has influenced many macroeconomic models and policies over the past few decades. The other options are not directly related to rational expectations theory.

Which of the Following Ideas of the Rational Expectations Theory