If Wages and Other Input Prices Are Inflexible, Then the Economy

question 75

True/False

If wages and other input prices are inflexible, then the economy will not automatically adjust to full
employment in the long run.

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Definitions:

Habituation

The process by which an organism decreases or stops its responses to a repetitive stimulus that neither rewards nor harms.

Risk Avoidance Theory

A concept in decision-making and psychology that describes the tendency to avoid situations or actions that could lead to negative outcomes.

Sensitization

Sensitization is the increased response to a stimulus following its repeated exposure, leading to an escalated response to subsequent exposures.

B State

Refers to a theoretical physiological state that an organism is in, affecting its learning and behavior; often not a scientifically established term.