If people base their forecasts on rational expectations, their forecast is the:
A)only forecast based on previous observations.
B)best possible forecast based on all private information.
C)best possible forecast based on past observations.
D)best possible forecast based on all public information.

Question

Quizplus · Accepted Answer

Rational expectations imply that individuals use all available information, including public information, to make the most accurate forecasts possible.

If People Base Their Forecasts on Rational Expectations, Their Forecast