Recall the Application. The change in demand for cigarettes resulting from the decrease in taxes would normally create, ceteris paribus
A) a decrease in their quantity supplied. B) a decrease in their supply.
C) an increase in their supply. D) an increase in their quantity supplied.
Question 2
A hypothesis that assumes that people combine the effects of past policy changes on economic events and their own judgment about future effects of current and future policy changes is known as
A) active expectations. B) modern expectations.
C) rational expectations. D) adaptive expectations.
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