INFLEXIBLE WAGES: The proposition that some wages adjust slowly in response to labor market shortages or surpluses. This condition is most important for macroeconomic activity in the short run and short-run aggregate market analysis. In particular, inflexible (also termed rigid or sticky) wages are a key reason underlying the positive slope of the short-run aggregate supply curve. See also | market | shortage | surplus | price | short-run aggregate market | short-run aggregate supply | short-run aggregate supply curve | flexible prices | price level | real production | aggregate demand | unemployment | employment | resource prices |
