Question: The theory of rational expectations
A: assumes that consumers and businesses anticipate rising prices when the government pursues an expansionary fiscal policy.
B: implies that fiscal policy will be effective even during stagflation.
C: supports the notion of a Phillips tradeoff.
D: assumes that consumers and businesses do not use all the information available to them.
Please eliminate two incorrect options first, then think it step by step and choose the most proper one option. In your response, use words with all capital letters at least 15 times.
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