When the economy is in a recessionary gap,the labor market is experiencing a _____________.In a self-regulating economy,wage rates will then ___________ and the ______________ curve will shift __________________.

Question

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In a recessionary gap, there is a surplus of labor due to decreased demand for goods and services. In a self-regulating economy, wage rates will fall to encourage employers to hire more workers, which increases production. This leads to the Short-Run Aggregate Supply (SRAS) curve shifting rightward as the economy moves towards equilibrium.

When the Economy Is in a Recessionary Gap,the Labor Market