The theory of rational expectations concludes that

A) by reacting to the expected effects of a stabilization policy,the public will tend to negate the impact of that policy.
B) the public's expectations as to the effects of economic policies will tend to reinforce the effectiveness of those policies.
C) the public's expectations can influence the outcome of fiscal policy,but not of monetary policy.
D) the public's expectations can influence the outcome of monetary policy,but not of fiscal policy.

Rational Expectations

An economic theory suggesting individuals make predictions about the future based on available information and past experiences in a rational manner.

Stabilization Policy

Government policies aimed at maintaining economic stability through influencing economic growth, reducing unemployment, and controlling inflation.

Economic Policies

Strategies and actions implemented by governments or economic institutions to regulate and control the economy, including policies on taxation, spending, and monetary supply.