Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Determination of L in the cross model
As firms will produce less than YOPT, they require less labor than LOPT. We can determine exactly how much L they need in order to produce Y* and this level of L is denoted by L*.
Figure: Determination of L in the cross model
1. Start at bottom left. Here equilibrium level of GDP (denoted by Y*) is determined. We can add Y* on the y-axis as well because YD = Y* in equilibrium.
2. Extend Y* to bottom-right graph. This is aggregate supply.
3. From the production function we can determine exactly how much labor we need to produce Y*. This amount is signified by L*.
4. Extend L* up to upper right-hand graph. As real wage is fixed, we should be on horizontal line and we find the equilibrium for the labor market.
5. In the same figure you would also find LOPT, quantity of labor firms would choose if aggregate demand was enough.
Note a crucial difference amid classical and Keynesian model: in classical model we first figure out L and go from L to Y whereas in cross model we go from Y to L.
An effort to reduce energy costs, a major university has installed more efficient lights as well as automatic sensors that turn the lights off when no movement is present in a room
You have a choice between a lottery lump sum payout of $10,000,000 today or a series of 25 annual annunity payments the first payment will be one year from today ad a discount rate
In the late 1990s, a growing number of economists expressed concern that the world policy makers were often focusing too much on fighting inflation, without fully taking into accou
Suppose that between January 2011 and January 2012 the total number of people employed and the unemployment rate both fell. Briefly explain how this is possible. [2 marks]
the production of 200 units of consumer goods and 300 units of capital goods : a) indicates full employment b) may be a result of unemployment c) may be impossible for now d)
Describe dynamic multiplier
Changes in demand-Baby diapers and retirement villagesOther things equal, an increase in the number of buyers for a product or service will increase -demand. Baby diapers and retir
• Select Facultyapproved publicly traded firm (prefer from Middle East or international unique company) which allows access to it financial information (inform me by email which co
Think of a business firm you recently visited (such as Walmart, Home Depot, Red Lobster, Barnes & Noble, McDonald's, etc.). What motivated the producers of all the individual produ
How can franchises ensure their products are appropriate for international markets?
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd