If wages and other input prices are inflexible, then the economy will not automatically adjust to full employment in the long run.

Name: If wages and other input prices are inflexible, then the economy will not automatically adjust to full employment in the long run.
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Question

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Inflexible wages and input prices can prevent the economy from adjusting to full employment because they hinder the natural adjustment processes like wage reductions that would typically help restore equilibrium.

If Wages and Other Input Prices Are Inflexible, Then the Economy