MAJOR ISSUSES IN MACROECONOMICS
MAJOR ISSUSES IN MACROECONOMICS
Employment and unemployment .
The ist major issue in macroeconomics is to explain what determines the level of employment and national income in an economy and there fore what causes involunary unemployment ,why is level of national income and employment very low in times of derpression as in 1930s in various capitalist countreies of the world.this will explain the cause of huge enemployment that emerged in these countries .as metnioned above classical economists denioed that there could be unemployment of labour and other resourcs for a long time ,they thought that with changes in wages and prices ,unemployment would be automatically removed and full employment established ,but this did not appear to be so at the time of depression in the thirties and after ,keynes explained that level of employment and national income is determined by aggregate demand and aggregate supply with aggregate supply curve remainning unchanged in the short run ,it is the deficiency in aggregate demand that cause underemployment equilibrium with the appearance of unemployment ,according to him ,it is the chages in private investment that causes fluctuations in aggregate demand and is there fore, resposible for the problesms of cyclical unemployment ,we will explain keynes's theory of employment and income and its various aspects in detail in the subsequent chapters.
info education
by santosh
Employment and unemployment .
The ist major issue in macroeconomics is to explain what determines the level of employment and national income in an economy and there fore what causes involunary unemployment ,why is level of national income and employment very low in times of derpression as in 1930s in various capitalist countreies of the world.this will explain the cause of huge enemployment that emerged in these countries .as metnioned above classical economists denioed that there could be unemployment of labour and other resourcs for a long time ,they thought that with changes in wages and prices ,unemployment would be automatically removed and full employment established ,but this did not appear to be so at the time of depression in the thirties and after ,keynes explained that level of employment and national income is determined by aggregate demand and aggregate supply with aggregate supply curve remainning unchanged in the short run ,it is the deficiency in aggregate demand that cause underemployment equilibrium with the appearance of unemployment ,according to him ,it is the chages in private investment that causes fluctuations in aggregate demand and is there fore, resposible for the problesms of cyclical unemployment ,we will explain keynes's theory of employment and income and its various aspects in detail in the subsequent chapters.
info education
by santosh
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