If the economy is self-regulating and in an inflationary gap,
A) wages and prices will fall.
B) wages will rise,but prices will fall.
C) wages and prices will rise.
D) wages will fall,but prices will rise.
E) neither wages nor prices will change.

Question

Quizplus · Accepted Answer

In an inflationary gap, demand exceeds supply, leading to upward pressure on both wages and prices as employers compete for workers and consumers compete for goods.

If the Economy Is Self-Regulating and in an Inflationary Gap