Final answer:
The economy is expected to self-regulate and move back to potential GDP according to neoclassical economics. Excessive unemployment will correct itself through market forces, leading to a rightward shift of the SRAS curve. However, a goal of zero percent unemployment is not feasible as it goes against market forces and tends to induce inflation without increasing long-term real GDP.
Step-by-step explanation:
An economist who believes the economy is self-regulating would indeed assert that, in the face of a gap at Q1 where the economy is not at potential GDP, market forces will work to push the economy back to potential GDP without the need for government intervention. The belief is that if there is excessive unemployment and the economy is below its full employment level (an output gap), wages will eventually fall, leading to a rightward shift of the short-run aggregate supply curve (SRAS). This shift will move the economy back to its potential GDP, often referred to as the long-run aggregate supply (LRAS), at a new equilibrium. Therefore, the true economic statement is that a self-regulating economist expects corrections over time without government intervention, aligning with the principles of economics.
As economic output rises above potential GDP and the unemployment level falls below its natural rate, there will be a labor shortage. This condition prompts employers to raise wages to attract needed workers. Over time, these higher wages will increase the cost of production leading to a leftward shift in the SRAS, bringing the economy back to its potential output, but with a higher level of prices, known as inflation. This scenario is consistent with the long-run neoclassical analysis.
From a policy standpoint, these economic dynamics show why it is not feasible to have zero percent unemployment as a goal because it is inconsistent with market forces and likely to induce inflation, without increasing real GDP in the long run.