Which statement is NOT an effective criticism of rational expectations?

Question

Quizplus · Accepted Answer

Rational expectations theory assumes that individuals make predictions about the future based on all available information, including the understanding of government policies. The criticism that errors about future expectations are randomly distributed aligns with the rational expectations hypothesis, which posits that although individuals may make errors in their predictions, these errors are random and not systematically biased. Therefore, stating that errors are randomly distributed does not effectively criticize the rational expectations theory; instead, it supports one of its fundamental assumptions.

Which Statement Is NOT an Effective Criticism of Rational Expectations