Which of the following statements is consistent with the rational expectations hypothesis?

Question

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The rational expectations hypothesis posits that people incorporate all available information, including past policy changes and their own judgments about future policy changes, into their decisions. Option B reflects this idea. Option A suggests that people rarely behave rationally, which contradicts the hypothesis. Option C is too absolute a statement, as it is unlikely that every person always behaves rationally. Option D suggests that every person is always correct in their predictions, which is unrealistic.

Which of the Following Statements Is Consistent with the Rational