Q. Which of the following statements is(are) correct? (Solved)
1. Even the earliest political business cycle and partisan models assume that expectations were rational
2. The partisan model of fiscal policy cannot be modified to be consistent with rational expectations
3. The myopic, or short-sighted behaviour of voters is inconsistent with rational expectations
4. The earliest political business cycle models assumed that expectations were always rational, whereas the partisan model assumed that expectations were sometimes irrational.
- c. The myopic, or short-sighted behaviour of voters is inconsistent with rational expectations