When individuals use ________ about an economic variable to make a decision,expectations are rational.

Question

Quizplus · Accepted Answer

Rational expectations assume that individuals use all available information about an economic variable to make decisions. This means that they consider not only historical information or information announced by the Fed but also any other relevant information garnered from the private sector, such as market trends, insider knowledge, or forecasts. The idea is that individuals make informed decisions based on their expectations of future outcomes, rather than relying solely on past or current data.

When Individuals Use ________ About an Economic Variable to Make