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An economic model in which prices are fixed in the short run, and quantities adjust faster than prices. This is contrasted with a flexprice model, in which quantities are fixed in the short run, and prices adjust faster than quantities. The real world is a mixture of markets where relative prices adjust faster than quantities, for example the foreign exchange market and stock markets, and markets where quantities adjust faster than relative prices, for example the labour market and markets for industrial products.

Subjects: Economics.

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