People adjust prices to eliminate excess demand and excess supply. Shortage of output, the price level must rise. Surplus of output, the price level must fall. Price level rises, output stays the same. Price level falls, output stays the same.
Price level falls, output increases.
Price level rises, output falls. Hume's thought experiment. Full employment is a conclusion that follows from the flexible price assumption. It is not itself an assumption. In terms of a Production Possibilities Curve, the flexible price assumption implies that the economy is always on the frontier.