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Rational Expectations Theory Is Based on All of the Following

Question 219

Multiple Choice

Rational expectations theory is based on all of the following assumptions,except


A) that individuals and business firms learn through experience to anticipate the consequences of changes in monetary and fiscal policy.
B) that individuals and business firms act instantaneously to protect their economic interests.
C) that demand creates its own supply.
D) that all resource and product markets are purely competitive.

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