The notion that expectations will be identical to optimal forecasts using all available information is known as ________.
A)adaptive expectations
B)irrational expectations
C)rational expectations
D)tertiary expectations

Question

Quizplus · Accepted Answer

Rational expectations theory assumes that people make use of all available information, including past experiences to form accurate expectations about the future. Thus, expectations will be identical to optimal forecasts using all available information.

The Notion That Expectations Will Be Identical to Optimal Forecasts