John Maynard Keynes' description of how investors set expectations:
A) conflicts with Muth's rational expectations hypothesis that underlies modern macroeconomic and financial analysis.
B) is perfectly compatible with the rational expectations hypothesis that underlies modern macroeconomic and financial analysis.
C) suggests that financial markets work even better than the rational expectations hypothesis predicts.
D) explains why the short-term focus of financial markets results in prices that efficiently guide long-run investment decisions.
Correct Answer:
Verified
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