1. The period from 2007 to 2009 was a time of economic contraction that some called the “Great Recession.” During periods of recession, most firms experience a decline in demand for their product. All other things being equal, macroeconomic theory predicts that the wage of most workers should decline in recessionary periods. However, this was not the case in the 2007- 2009 recession, or during many other economic downturns throughout recent history. Based on the discussion in the chapter, explain why this might be so, and what the implications are for unemployment.