Why an economy may enter a recession
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Title: Why an economy may enter a recession

Essay Details:

Subject: Social Issues
Author: Lewis C
Date: May 19, 2014
Level: College
Grade: A
Length: 1 / 240

Essay text:

The falling level of output, lower sales and production means firms will reduce employment. If a long and deep recession occurs, and unemployment rises above the natural rate by the time the recovery happens, the natural rate will rise A more adverse cause of a recession, and the worst scenario for a government is a negative aggregate supply shock. This can happen due to an increase in production costs from a rise in prices, of oil or crops for example. At an increased production cost, firms are less willing to supply goods and services at any given price level. The result is that the supply curve shifts to the left from AS to AS1...

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