Which of the following is consistent with the classical position on wages and prices? a. Wages...
Which of the following is consistent with the classical position on wages and prices?
a. Wages and prices are inflexible in the downward direction, but not in the upward direction.
b. Prices are inflexible in the downward direction, but wages are flexible.
c. Wages and prices are flexible.
d. Wages are inflexible in the downward direction, but prices are flexible.
Homework Answers
Correct option is (c).
As per Classical economics, wages and prices are completely flexible, both upward and downward, and quickly adjust to any economic shocks.
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