This school of thought argues that because people anticipate the consequences of announced government policy and incorporate these anticipated consequences into their present decision making, people end up undermining the government policy. What is it?
A)Neo-Keynesian.
B)Keynesian.
C)Monetarist.
D)Supply-side.
E)Rational expectations.

Question

Quizplus · Accepted Answer

The Rational Expectations theory suggests that individuals use all available information to predict future events and adjust their behavior accordingly, often neutralizing the intended effects of government policy.

This School of Thought Argues That Because People Anticipate the Consequences