If labour markets had perfectly flexible wages,as the market-clearing theories suggest,involuntary unemployment would

Question

Quizplus · Accepted Answer

According to market-clearing theories, if wages were perfectly flexible, the supply and demand of labor would always equate, and there would be no involuntary unemployment. This is because workers and firms would adjust their behavior and wages in response to changes in the labor market conditions, resulting in a continuously adjusting equilibrium.

If Labour Markets Had Perfectly Flexible Wages,as the Market-Clearing Theories