Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Chapter 25, Problem 11RQ

Why do sticky wages and prices increase the impact of an economic downturn on unemployment and recession?

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When a recession hits, should the government take strong steps to get the economy going again and put the unemployed back to work?
In 1929 the US had an unemployment rate of approximately 3.2%, or 1.6 million people unemployed, yet most economists suggest we were at full employment. What do economists mean by "full employment"?
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