Ch07-8e_macro - CHAPTER 7 At Full Employment The Classical...

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At Full Employment: The Classical Model CHAPTER 7
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2 After studying this chapter you will be able to Explain the purpose of the classical model Describe the relationship between the quantity of labor employed and real GDP Explain what determines the full-employment level of employment and real wage rate and potential GDP Explain what determines unemployment when the economy is at full employment
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3 After studying this chapter you will be able to Explain how borrowing and lending decisions interact to determine the real interest rate, saving, and investment Apply the classical model to explain changes and international differences in potential GDP and the standard of living
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