A person who believes the economy is self-regulating also believes that
A) when there is a surplus in the labor market, the wage rate falls, and when there is a shortage in the labor market, the wage rate rises.
B) it is better if the economy is in an inflationary gap than a recessionary gap.
C) prices are flexible but wages are not.
D) the economy is always in long-run equilibrium.
E) the real balance effect does not operate in a recessionary gap.
A
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Which statement is false?
A. All oligopolies have only a few firms. B. Most firms in the United States are oligopolies. C. Administered prices are most likely to occur under oligopoly. D. In all market structures, price is always read off the demand curve.
Income taxes are an automatic stabilizer because when income falls, ceteris paribus, tax receipts
A. Fall as taxpayers experience bracket creep. B. Rise because automatic stabilizers work against the cyclical movements of the GDP. C. Fall because income taxes are regressive. D. Fall because taxes are computed on the basis of income.
If the prices of the factors used to produce a good change, both the demand curve and the supply curve of the good will shift.
Answer the following statement true (T) or false (F)
The Herfindahl-Hirschman Index measures:
A. the degree of concentration in a market. B. the percentage of market share held by the four largest firms in a market. C. the percentage of market share held by the largest firm in a market. D. the market share held by the largest firm in a market divided by the market share held by all other firms in the market.