A rational expectation is

Question

Quizplus · Accepted Answer

A rational expectation is not necessarily correct, but it is the best available forecast based on all the information and knowledge that is available at the time the forecast is made. Therefore, option C is the correct answer. Option A is not correct because a rational expectation can be the best available forecast but not necessarily correct, and option B is incorrect as a rational expectation is usually based on all available information and knowledge, and is not expected to be an incorrect forecast. Option D is not correct because a rational expectation is not always necessarily correct, as there might be unforeseeable events that can affect the outcome.

A Rational Expectation Is