The rational expectations hypothesis does not imply:
A. People do not make systematic errors.
B. On average the economy will be close to Long-run Average Supply (LAS) Curve.
C. Policy makers have better information about the economy than other economic actors.
D. Macroeconomic policy changes must came as a surprise in order to have an impact on the real economy.
Answer:C
The rational expectations hypothesis does not imply:
A. People do not make systematic errors. B. On average the economy will be close to Long-run Average Supply (LAS) Curve. C. Policy makers have better information about the economy than other economic actors. D. Macroeconomic policy changes must came as a surprise in order to have an impact on the real economy.