How does the self-correcting mechanism act to pull the economy out of a recession?

During a recession (when actual output is below potential output), weak resource demand and high unemployment place downward pressure on prices in the resource market. As resource prices fall, the profit rates of firms increase, and firms begin to expand output. This expansion draws the economy back toward full employment and out of the recession. Graphically, this is represented by a shift in SRAS to the right. In addition, weak demand for investment will place downward pressure on interest rates. In turn, the lower interest rates will stimulate aggregate demand (shift AD to the right). This will also help direct the economy back to full-employment equilibrium.