A country experiences a sudden recession in its primary trading partner, leading to a significant decrease in export demand. Which of the following outcomes is most likely to occur in the country’s economy regarding Full Employment Equilibrium?

When a country faces a sudden recession in its main trading partner, it means that fewer goods and services are being bought from the country. This decrease in export demand can lead to lower production levels, as businesses may not need to make as much if they have fewer customers. As a result, companies might have to cut back on their workforce, leading to higher unemployment rates. This situation disrupts Full Employment Equilibrium, where everyone who wants to work can find a job. For example, if a country that exports cars sees its main buyer reduce orders, car manufacturers may lay off workers, pushing the economy away from full employment.