A necessary condition for the economy to be self-regulating is that
A) wages must be relatively high.
B) the labor market must always be in equilibrium.
C) the interest rate must be above its equilibrium level.
D) wages must be flexible in both an upward and downward direction.
E) none of the above

Question

Quizplus · Accepted Answer

This is because if wages are flexible in both an upward and downward direction, then the market can adjust to changes in supply and demand, without the need for government intervention. This means that the economy can self-regulate without any external influence.

A Necessary Condition for the Economy to Be Self-Regulating Is