The condition of fully flexible wages and prices was assumed by
A) the classical economists.
B) the Keynesian economists.
C) modern economists.
D) no economists.

Question

Quizplus · Accepted Answer

The assumption of fully flexible wages and prices is a core principle of classical economics, which emphasizes the self-correcting nature of markets and the importance of laissez-faire policies. Keynesian economics, on the other hand, emphasizes the role of government intervention in stabilizing the economy during periods of recession or inflation, and recognizes that wages and prices may not always adjust quickly in response to changes in demand and supply. Modern economists may incorporate elements of both classical and Keynesian thought, but neither fully embraces the assumption of fully flexible wages and prices.

The Condition of Fully Flexible Wages and Prices Was Assumed