Answer to Question #53075 in Other Economics for candy
labor explained in this theory? How does this explanation differ from the neoclassical
interpretation of the labor market? Explain, using Keynes’s concept of effective demand, why
falling wages, in the context of unemployment, might not lead to the full employment of labor.
Keynes designated the term “effective demand” to denote ’the total demand of goods and services (both for consumption and investment) by the people in a community. In a money economy, thus, effective demand manifests itself in the spending of income or the flow of expenditure.
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