Potential income and the labour market - The classical labour market - Labour supply
6 important questions on Potential income and the labour market - The classical labour market - Labour supply
What is the difference between active population and the labour force?
What does the labour supply curve depict?
How does the real wage rate w=W/P ork?
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What does perfectly flexible money wages imply in the classical labour market model?
What property of the aggregate supply curve does the classical labour market model imply?
How do you find potential income from a labour market equilibrium?
Find the point in the partial production function where the slope equals this real wage
The output at that point is the potential income
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