Final answer:
When the demand for labor shifts left from D0 to D1 due to a recession and wages don't immediately adjust due to downward stickiness, the quantity of labor demanded decreases, leading to unemployment, which represents workers willing to work at the previous wage but unable to find jobs.
Step-by-step explanation:
Given the labor supply and demand curves, referred to as D0 and S0, and considering the market-clearing theory of unemployment, the statement that is true is that at the equilibrium wage, the quantity of labor supplied is equal to the quantity of labor demanded. However, when there is a shift in the labor demand curve, such as a leftward shift from D0 to D1 as depicted in the figures mentioned, there's a situation where the equilibrium wage does not adjust immediately due to wage stickiness. This wage stickiness in the short run leads to a quantity of workers, Qo, willing to work at the initial wage but the quantity demanded decreases to Q2. The difference between Qo and Q2 is the number of workers who are willing and able to work but cannot find jobs, illustrating economic unemployment.
The complete question is .....refer to figure 30-1. given the labour supply and labour demand curves, d0 and s0, which of the following statements is true in the market-clearing theory of unemployment?......./;