When prices in the economy have NOT fully adjusted,we say that:
A) we are in the short run.
B) we are in the long run.
C) it is a period of time less than one year.
D) it is a period of time less than five years.
E) the market is not in equilibrium.

Question

Quizplus · Accepted Answer

When prices in the economy have not fully adjusted, we are in the short run. In the short run, prices and wages are often "sticky," meaning they do not adjust as quickly as changes in supply and demand. It is why the market may not be in equilibrium, and prices are still adjusting to reach the new market-clearing price.

When Prices in the Economy Have NOT Fully Adjusted,we Say