In rational expectations theory, a fully anticipated change in aggregate demand or in the price level
results in no change in real output.

Question

Quizplus · Accepted Answer

In rational expectations theory, agents have correct information and adjust their behavior accordingly, which means that any fully anticipated change in aggregate demand or in the price level will not affect real output as agents will have already adjusted their behavior to the new information.

In Rational Expectations Theory, a Fully Anticipated Change in Aggregate