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Question #49006

People are said to have rational expectations if they ?

Options:

A) assume that this year’s inflation rate will be the same as last year’s inflation rate

B) merely guess at the inflation rate.

C) assume that this year’s inflation rate will be equal to the average inflation rate over the past 10 years

D) Use all available information in forming their expectations.

Answer: People are said to have rational expectations if they Use all available information in forming their expectations..

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