When people use all the relevant data and principles of economics to forecast inflation,they are making

Question

Quizplus · Accepted Answer

When people use all the relevant data and principles of economics to forecast inflation, they are forming a "rational expectation" which is based on the idea that people use all available information and their own experiences to make the best predictions possible. While this type of forecast is not always accurate, it is based on sound economic principles and is considered a rational approach.

When People Use All the Relevant Data and Principles of Economics