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meganA meganA
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5 years ago

The argument in favor of rational expectations is that



▸ people will continue to acquire information as long as the marginal benefit of that information is positive.

▸ individuals have a very good idea of what to expect from the government in terms of monetary policy but not fiscal policy.

▸ it is costless for individuals and firms to form rational expectations.

▸ if expectations were not rational, there would be unexploited profit opportunities available.
Textbook 
Principles of Economics

Principles of Economics


Edition: 12th
Authors:
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beunikuelbeunikuel
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5 years ago
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