A Person Who Believes the Economy Is Self-Regulating Also Believes

Multiple Choice

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.