ECON-2006EG Study Guide - Quiz Guide: Business Cycle, Aggregate Demand, Real Interest Rate
7 Mar 2021
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1: most severe u. s. economic contraction since modern methods for measuring. 1930s: depression: used to describe a prolonged recession with an unemployment rate of 20 percent or more. Summary of shifts in the labor demand curve (left: changing output prices: price of output goes down. > value of marginal product of labour also declines. Opposite effects cause shift to the right. 4: shock causes labor to shift left, leads unemployed workers to cut back their demand for goods and services, leading the businesses that provide goods and services to further reduce their labor demand . Full recovery: labour demand curve begins at. At point 4, wage rigidity is no longer a constraint, bc market clearing wage is above downward rigid wage. Increase in employment and fall in unemployment accompanying economic booms increase popularity of policymakers, encouraging them to let economic booms continue, especially during election years.
