If the economy is self-regulating and in inflationary gap A) wages and prices wi
ID: 1111444 • Letter: I
Question
If the economy is self-regulating and in inflationary gapA) wages and prices will fall B) wages will rise, but prices will fall C) wages and prices rise D) wages will fall, but prices will rise E) neither wages nor prices will change If the economy is self-regulating and in inflationary gap
A) wages and prices will fall B) wages will rise, but prices will fall C) wages and prices rise D) wages will fall, but prices will rise E) neither wages nor prices will change
A) wages and prices will fall B) wages will rise, but prices will fall C) wages and prices rise D) wages will fall, but prices will rise E) neither wages nor prices will change
Explanation / Answer
Answer
Option C
the self-regulating is done gradually by increase in wages the short run supply curve shift to the left and the price level increases which increases both wages and the price level.
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