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Model of supply and demand in recession

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(a) During the recession we have seen a significant increase in unemployment. Use the model of supply and demand to illustrate what has happened.

(b) It is a common observation that wages are â??stickyâ? downwards. Discuss the implications of this in relation to part (a) of the question.

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This solution illustrates supply and demand curve in time of recession

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a) During the recession we have seen a significant increase in unemployment. Use the model of supply and demand to illustrate what has happened.
During recession, people do not spend their money. As people cut back on spending, companies find it difficult to sell their produce due ...

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