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Test: Macro 1 Test 4 (Block 4) Time Limit: 00:35:00 Submit Test This Question: 1 pt 9 of 10 (0 complete) This Test: 10 pts possible In considering the expectations-augmented Phillips curve, it is necessary to analyse how economic agents form their expectations. Rational expectations state that: people base their expectations on the current state of the economy and the current policies being pursued by the government. expectations are formed solely on the basis of information from the past. O expectations are based on the rate of inflation in the previous year. O expectations are based upon perfect information. O government economic policy will always be predicted and hence people will adapt to it before it takes effect