Which of the Following Statements Is True

question 3

Multiple Choice

Which of the following statements is true?

• A) If current Real GDP is greater than Natural Real GDP,the economy is in a recessionary gap.
• B) If current Real GDP is less than Natural Real GDP,the economy is in long-run equilibrium.
• C) Wages are flexible if the economy is self-regulating.
• D) Wages rise but prices remain constant in long-run equilibrium.
• E) All economists believe the economy is self-regulating.

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Definitions:

Caterpillar

The larval stage of a butterfly or moth, characterized by its segmented body and growth through molting.

Turtle

A reptile characterized by a shell covering its body, which allows it to retract its head and limbs for protection; they can live in aquatic or terrestrial habitats.

Cheetah

A large felid of the subfamily Felinae, known for its incredible speed and agility, making it the fastest land animal.

Dual-Coding Hypothesis

The assertion that long-term memory can code information in two distinct ways, verbally and visually, and that items coded both ways (e.g., pictures and concrete words) are more easily recalled than items coded in only one way (e.g., abstract words).