which of the following statements helps to explain why the e

which of the following statements helps to explain why the economy can be slow to recover from a recession/

Solution

Once an economy faces a recession, it will take time for it to recover due to the following effects:

Workers will be producing less as they will not be paid very high. Due to this workers will be less motivated and subsequently have a reduced expectation. This will cause the total output to fall.

Since the economy is recovering from a recession, the money circuation in the economy will be less which in turn will haul new investment.

Change in wages will not happen overnight, it will take some time which might cause a delay in adjustment to higher output level.

These statement will help us to understand why the economy can be slow to recover from a recession.