In an economy that is in a recession, with employment below equilibrium,

Question

Quizplus · Accepted Answer

In a recession, when employment is below equilibrium, workers are likely to value the additional income from an hour of work more than their valuation of an hour of leisure, indicating that they would benefit from working more if given the opportunity. This is because the lack of sufficient employment opportunities makes the income from work more valuable relative to leisure time.

In an Economy That Is in a Recession, with Employment