If the Economy Is Self-Regulating,then It Follows That

question 66

Multiple Choice

If the economy is self-regulating,then it follows that

• A) recessionary and inflationary gaps are temporary economic states.
• B) wages will fall when the economy is in a recessionary gap.
• C) wages will rise when the economy is in an inflationary gap.
• D) the economy is always in long-run equilibrium.
• E) a,b and c

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Definitions:

Simultaneous Game

A strategic situation where all players make their decisions at the same time without knowledge of the others' choices.

Equilibrium

A state in a market or economy where supply and demand are balanced, leading to stable prices and quantities.

Sequential Game

A type of game in game theory where players make moves one after another rather than simultaneously.

Monopolized

Dominated or controlled entirely by a single entity, often reducing competition in the market.