Final answer:
The statement is true. Rational expectations theory assumes that both product and resource markets are competitive and that wages and prices are flexible.
Step-by-step explanation:
The statement is true. Rational expectations theory assumes that both product and resource markets are competitive and that wages and prices are flexible.
This means that individuals in the economy make predictions about future economic conditions based on all available information, and that markets are able to adjust quickly to changes in supply and demand.