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Flexible wages and prices

Written by the Fiveable Content Team • Last updated August 2025
Verified for the 2027 exam
Verified for the 2027 exam•Written by the Fiveable Content Team • Last updated August 2025

Definition

The ability of wages and prices to adjust upward or downward in response to economic shocks, enabling the economy to return to full employment in the long run.

AP course connection

Topic 3.7: 3.7 Long-Run Self-Adjustment

Unit 3

Keep studying

Review this concept in 3.7 Long-Run Self-AdjustmentAP Macroeconomics course hub

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