-Refer to the above figure. The rational expectations hypothesis implies that an anticipated decrease in aggregate demand from AD₂ to AD₁ will

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The rational expectations hypothesis suggests that people will adjust their expectations based on available information. If a decrease in aggregate demand is anticipated, individuals and firms will adjust their behavior accordingly, leading the economy to move from point b to point a, where the new equilibrium is established at the intersection of AD₁ and the short-run aggregate supply curve.

-Refer to the Above Figure