Source: Paul Roderick$$ Gregory, "Thomas$$ Sargent, Rational Expectations And The Keynesian$$ Consensus,"

Forbes$,$

October$11,2011.$

Part $2$

When Gregory says that the$$ "policy $...$ is unlikely to have a stimulative effect because it will be easily$$ anticipated," he indicates his belief that households and businesses have

A$.$

rational expectations of inflation in which all available information is used in forming expectations.

B$.$

adaptive expectations of inflation in which the pattern of rates of inflation in the recent past is used in forming expectations.

C$.$

rational expectations of inflation in which the pattern of rates of inflation in the recent past is used in forming expectations.

D$.$

adaptive expectations of inflation in which all available information is used in forming expectations.