Question

At a macroeconomic level, the theory of rational expectations points out that if the __________ is vertical over time, then people should rationally expect this pattern. A. GDP B. Phillips curve C. aggregate demand curve D. aggregate supply curve

Answer 1

Answer is D....Aggregate supply curve.

Step-by-step explanation:

The total quantity of output firms will produce and sell is the aggregate supply curve.

It shows that there is positive relationship between real GDP and price level in short run.