Explain How the Economy Moves Back to Full Employment from Recession.Be

question 181

Essay

Explain how the economy moves back to full employment from recession.Be sure to detail what happens to short-run aggregate supply,unemployment,equilibrium GDP and the price level.

---

Definitions:

Shift

In economics, a movement or change in the position of a supply or demand curve in response to external factors.

MC, AVC, ATC Curves

Graphical representations in economics of the marginal cost, average variable cost, and average total cost, respectively, which firms use for production and pricing decisions.

Economies of Scale

Cost advantages that businesses obtain due to the scale of operation, with cost per unit of output generally decreasing with increasing scale.

Long-Run Average Total Cost Curve

A curve that shows the lowest average cost at which a firm can produce any given level of output in the long run, when all inputs are variable.