EC1301_-_Lecture_8_-_The_Economy_at_Full_Employment

EC1301_-_Lecture_8_-_The_Economy_at_Full_Employment -...

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1 EC1301 The Economy at Full Employment © Connie CHUNG LECTURE 8  Section 1 THE ECONOMY AT FULL EMPLOYMENT  
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2 EC1301 The Economy at Full Employment © Connie CHUNG Agenda Production Function Wages and the Demand and Supply of  Labor Labor Market Equilibrium and Full  Employment Full Employment Model
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3 EC1301 The Economy at Full Employment © Connie CHUNG Objectives 1. Use the  Production Function  to  determine the level of output  2. Examine how the amount of employment  is determined by the  demand and supply  of labor 3. Show how much output the economy can  produce when it is operating at  full  employment
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4 EC1301 The Economy at Full Employment © Connie CHUNG Key Terms classical model real wage  labor stock of capital  substitution effect  income effect production function full-employment output
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5 EC1301 The Economy at Full Employment © Connie CHUNG Wage and Price Flexibility and Full Employment Models that assume (over a relatively short  period of time) that wages and prices adjust  freely to changes in demand and supply are  called  classical models   this flexibility in wages and prices allows       economy to operate at  full employment We will explain  how the amount of capital and  labor determine GDP  when the economy is at  full employment
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6 EC1301 The Economy at Full Employment © Connie CHUNG Understanding Full Employment (Recap from earlier lecture)
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This note was uploaded on 03/19/2012 for the course ARTS EC1301 taught by Professor Forgot during the Fall '08 term at National University of Singapore.

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EC1301_-_Lecture_8_-_The_Economy_at_Full_Employment -...

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