Suppose country X suffers from a recession. Identify the mechanisms responsible for labor demand's medium run recovery f

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Suppose Country X Suffers From A Recession Identify The Mechanisms Responsible For Labor Demand S Medium Run Recovery F 1 (55.46 KiB) Viewed 70 times

Suppose country X suffers from a recession. Identify the mechanisms responsible for labor demand's medium run recovery from the recession in the following examples Labor market equilibrium Example Mechanism A toy company's excess inventories get sold off Market forces LS, Interest rates are lowered by 1.5 percentage points to attract investment Government policies The employees of firms which had to shut down-find other jobs Wage Market forces Downward rigid wage Government policies Corporate taxes in the country are decreased by 5 percentage points A rise in overall inflation due to an expansionary monetary policy raises the price of firm Z's cars. Government policies LD, Researchers develop a cheaper method of manufacturing steel Market forces Quantity of labor The adjacent graph shows the initial tabor supply curve (LS), initial labor demand curve (LD) and the Initial labor markel equilibrium in an economy Suppose the economiy now suffers from a recession Using the line drawing fool, show the short run impact of this shock on the economy with multipliers and label the labor demand curve LDM * the medium un partial recovery in the econoniy due to market forces and label the labor domand curve LDPR the medium run full recovery in the economy due to inflation and label the labor domand curve L.DER (Assume the full employment lovol is reached) Carefully follow the instructions above and only draw the required objects The post-rocession wage is the pre-recession wage the same as above below ted: Clear ?