The classical economists believe that prices and wages quickly adjust to keep the economy operating at full employment.

Question

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Classical economists believe in the flexibility of prices and wages, which leads to equilibrium in the labor market and goods market. This means that any temporary imbalances in the economy, such as unemployment, are quickly corrected by market forces, allowing the economy to return to full employment in the long run.

The Classical Economists Believe That Prices and Wages Quickly Adjust