In the Long Run, the Economy Is

Multiple Choice

In the long run, the economy is:

A) self-correcting, as commodity prices rise during recessionary gaps and fall during inflationary gaps to move the economy to long-run equilibrium.
B) self-correcting, as prices of goods that are sticky in the short run become very flexible in the long run and thus move the economy to full employment.
C) fluctuating, as nominal wages rise and fall during short-run economic fluctuations.
D) self-correcting, as nominal wages rise during recessionary gaps and fall during inflationary gaps to move the economy to long-run equilibrium.