Recovery from the 1990-91 recession occurred because wages fell and the aggregate supply curve shifted downward.

Question

Quizplus · Accepted Answer

Recovery from the 1990-91 recession occurred due to various factors, including monetary policy, increased government spending, and consumer confidence. While it is true that wages may have decreased during the recession, it is not the sole or even primary reason for the recovery. The downward shift of the aggregate supply curve can also contribute to increased output and economic growth, but this is not necessarily the case in every economic situation.

Recovery from the 1990-91 Recession Occurred Because Wages Fell and the Aggregate