Question

What are the consequences of Real wage unemployment?

Answer 1

This is a good question, I feel like the person who first responded gave a good detailed academic answer!

Answer 2

Step-by-step explanation:

Firstly, in a recession, if you cut wages, it will cause a fall in spending because people have less income, this will reduce aggregate demand and therefore lead to lower economic growth. This, in turn, will lead to less demand for labour.