What are the important mechanisms that reverse the effects of a recession in a modern economy? (Check all that apply.) A. Labor supply increases due to an increase in real wages. B. The multipliers on wages and employment return to normal. C. Labor demand increases due to expansionary government policies. D. Labor demand increases due to market forces. What market forces might cause the labor demand curve to shift back to the right? (Check all that apply.)

MACROECONOMICS
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Chapter14: The Financial Crisis And The Great Recessio
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What are the important mechanisms that reverse the effects of a recession in a modern economy? (Check all that apply.)
A. Labor supply increases due to an increase in real wages.
B. The multipliers on wages and employment return to normal.
C. Labor demand increases due to expansionary government policies.
D. Labor demand increases due to market forces.
What market forces might cause the labor demand curve to shift back to the right? (Check all that apply.)
A. Technological advances encourage firms to expand their activities.
B. The banking system recuperates and businesses are again able to use credit to finance their activities.
C. Excess inventory has been sold off.
D. Wage rigidity decreases.
Transcribed Image Text:What are the important mechanisms that reverse the effects of a recession in a modern economy? (Check all that apply.) A. Labor supply increases due to an increase in real wages. B. The multipliers on wages and employment return to normal. C. Labor demand increases due to expansionary government policies. D. Labor demand increases due to market forces. What market forces might cause the labor demand curve to shift back to the right? (Check all that apply.) A. Technological advances encourage firms to expand their activities. B. The banking system recuperates and businesses are again able to use credit to finance their activities. C. Excess inventory has been sold off. D. Wage rigidity decreases.
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