If forecasting errors are rational,then
A)people will always be error-prone.
B)they will be random,and thus independent of previous errors.
C)they will be independent of business firm production and price forecasts.
D)A and C are both correct.

Question

Quizplus · Accepted Answer

If forecasting errors are rational, it implies that people have access to all available information and are using the best available techniques to make forecasts. In such a scenario, errors will be random and independent of previous errors, as people are making unbiased predictions based on the best available information. Option A is not correct because being error-prone is not a consequence of rational forecasting. Option C is incorrect because forecasting errors can still be related to the production and price forecasts made by the company.

If Forecasting Errors Are Rational,then