In a Full Employment Equilibrium, the economy operates at its potential level, where the intersection of aggregate demand, short-run aggregate supply, and long-run aggregate supply occurs. If a recession in a trading partner country decreases demand for exports, the economy of country Alpha may experience a shift in its __________, leading to potential unemployment.

In a Full Employment Equilibrium, the economy is functioning at its best potential, meaning all resources are used efficiently, and most people who want to work can find jobs. If a trading partner country goes into a recession, it will buy fewer goods from country Alpha, which means the demand for Alpha's exports will drop. This decrease in demand can lead to a shift in the aggregate demand curve to the left, as consumers and businesses in Alpha will be selling less. As companies produce less due to reduced sales, they may need to cut back on hiring or even lay off workers, which can lead to higher unemployment. For example, if Alpha is known for exporting cars and its main trading partner buys fewer cars, car manufacturers in Alpha might have to reduce their workforce, impacting many families and the overall economy.