A necessary condition for a money economy to be self-regulating is that
A) wages must be flexible in an upward direction,but not in a downward direction.
B) the economy must always be operating on its institutional production possibilities frontier.
C) wages must be flexible in a downward direction,but not in an upward direction.
D) interest rates must be flexible in the credit market.
E) none of the above

Question

Quizplus · Accepted Answer

Interest rates must be flexible in the credit market to allow for the self-regulation of a money economy, as this flexibility helps balance savings and investments, influencing overall economic activity.

A Necessary Condition for a Money Economy to Be Self-Regulating