Which of the Following Statements Is Correct

Which of the following statements is correct?

A) Automotive manufacturers prefer stricter fuel economy regulations to higher gasoline taxes.
B) Higher gasoline taxes have provided a market-based incentive for Europeans to buy more fuel-efficient vehicles.
C) Higher gasoline taxes have had no effect on the U.S. demand for gasoline because the demand for gasoline is perfectly inelastic.
D) Fuel efficiency regulations are more effective than gasoline taxes in reducing the demand for gasoline in the United States and Europe.

Correct Answer:

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