Rational expectations theory suggests that ________.
A)consumers base their expectations about the future largely on past experience
B)economic agents will always alter their decision-making when a new piece of information becomes available
C)economic agents will not be influenced by a piece of information if that information has already been anticipated
D)consumers need not form expectations about the far flung future since most consumption decisions involve satisfying an immediate impulse,e.g.hunger

Question

Quizplus · Accepted Answer

Rational expectations theory suggests that economic agents will adjust their expectations based on available information, but if that information has already been anticipated, it will not have an impact on their decision-making. This is because rational economic agents will have already factored in the information into their expectations.

Rational Expectations Theory Suggests That ________