n the capital market, if a Öxed interest rate exists (horizontal line) where the dashed lines intersect, then in a recession (solid lines) the interest cannot fall to its equilibrium value. This causes an a. excess supply of capital at the pre-recession interest rate; b. excess demand for capital at the pre-recession interest rate; c. excess supply of labor at the pre-recession interest rate; d. excess demand for labor at the pre-recession interest rate

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