Microeconomists Generally Do Not Expect to See Excess Supplies in Most

question 51

Essay

Microeconomists generally do not expect to see excess supplies in most markets. However, macroeconomists will often observe that during recessions the quantity of labor supplied can exceed the quantity of labor demanded. Explain what macroeconomists are referring to and explain why the wage rate may not adjust right away.

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Definitions:

Bargained-For-Agreement

An arrangement reached after negotiation between parties, where each side gives something in exchange for what it receives.

Forbearance

An agreement between a lender and a borrower to temporarily suspend debt payments.

Accord and Satisfaction

A legal agreement whereby disputes are settled by the parties agreeing to accept something different from what was originally expected.

Release

An agreement where one party agrees to relinquish any claims, demands, or potential legal action against another party, often in return for compensation.