The hypothesis suggesting that people combine the effects of past policy changes on economic variables with their own judgment about the future effects of current and future economic policy is referred to as the

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The hypothesis described in the question is known as the rational expectations hypothesis. It suggests that individuals combine their knowledge of past policy changes with their own judgment about current and future policy changes to form their expectations of future economic conditions. This hypothesis is based on the idea that individuals are rational and use all available information to form their expectations.

The Hypothesis Suggesting That People Combine the Effects of Past