Are all prices in the economy equally inflexible? which ones show large amounts of short-run flexibility? which ones show a great deal of inflexibility even over months an

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Business

Shawn Rios

16 June, 15:17

Are all prices in the economy equally inflexible? which ones show large amounts of short-run flexibility? which ones show a great deal of inflexibility even over months an

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Abbigail Osborn · Answer 1

Are all prices in the economy equally inflexible?

Most prices are inflexible (sticky is another name used) in the short-run so that the economy can only adjust this if there are large changes in output. Inflexible prices normally stay the same even of demand increases, output will change but not the price.

Which ones show large amounts of short-run flexibility? Wages and prices are two economic factors that may have large amounts of short-run flexibility.

Which ones show a great deal of inflexibility even over months an? Expectations of workers are hard to change. Since these vary within different jobs, they may not be as flexible without many months of hard work to change them.