Multiple Choice
Which of the following is consistent with the rational expectations theory?
A) John is always right on his predictions of stock market prices.
B) Janice always underestimates inflation rates.
C) Michael always overestimates the effect of government purchases on GDP during recessions.
D) Mona is rarely right in her predictions of stock prices,but her errors are random.
Correct Answer:
Verified
Correct Answer:
Verified
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