Author Question: All available information in the definition of rational expectations means that a. agents use all ... (Read 79 times)

Bob-Dole · **on:** Jun 30, 2018

All available information in the definition of rational expectations means that

a. agents use all possible information that could be out there.
b. agents use all possible public information that could be out there.
c. agents use all information that is relevant.
d. agents use all information that is available in which the marginal benefits of the information are greater than the marginal costs of gathering the information.

Question 2

Time inconsistency is a problem when policymakers

a. have no flexibility in setting policy.
b. follow inflexible rules.
c. have discretion in their policy responses to changes in economic conditions.
d. does not follow the Taylor rule.
e. none of the above.