Explain the says law, Macroeconomics

Assignment Help:

Q. Explain the Says Law?

GDP, and Say's Law

Aggregate supply

YS = f(L, K) in the classical model where L is concluded in the labor market while K is exogenous

Aggregate supply YS is stated as the amount of finished services and goods firms in a country will want to sell under given conditions. In the classical model aggregate supply is concluded by production function, YS = f (L, K). 

The amount of capital in classical model is an exogenous variable; it isn't determined within the model though presumed to be given. However we typically presume that K is constant - which is reasonable in the short run - it need not to be constant. K may increase over time though we should know K at any point in time. 

Amount of labor, though, is an endogenous variable which is determined in the labor market. This concludes that YS is determined completely by the labor market in classical model. The below chart explains. 

1299_Explain the Says Law.png

Figure: Determination of aggregate supply


Related Discussions:- Explain the says law

Market structures, illustrate and discuss the market structures competitive...

illustrate and discuss the market structures competitiveand non competitive for price determination

Describe effects of hours spent studying, Design a hypothetical ideal rando...

Design a hypothetical ideal randomized controlled experiment to study the effects of hours spent studying on performance on microeconomics exams. Suggest some impediments to implem

#titleINTERNATIONAL TRADE., WHAT ARE THE TYPES OF PROTECTIONISM IN INTERNAT...

WHAT ARE THE TYPES OF PROTECTIONISM IN INTERNATIONAL TRADE

Fiscal, what is the supply side

what is the supply side

State the both -cyclical and classical unemployment, State the both -Cyclic...

State the both -Cyclical and Classical unemployment Cyclical unemployment Unemployment because of a recession. Classical unemployment Unemployment because of

International Trade, How can an economy achieve mutual gain from Internatio...

How can an economy achieve mutual gain from International Trade?

Describe an algorithm which gives initial amount , This problem involves th...

This problem involves the question of computing change for a given coin system. A coin system is defined to be a sequence of coin values v1 (a) Let c ≥ 2 be an integer constant

Simultaneous determination of y in the is-lm model, Q. Simultaneous determi...

Q. Simultaneous determination of Y in the IS-LM model? Simultaneous determination of Y and R in the IS-LM model   By combining IS curve and LM curve, we can graphically e

What is price elasticity of demand, Explain the elasticity concept as it ap...

Explain the elasticity concept as it applies to necessities and luxuries. Calculate the price elasticity of demand when P= 160 - Q= 480: and when P=240 - Q=320. Calculate and inter

Assumptions of the AS-AD model, Q. Assumptions of the AS-AD model? The ...

Q. Assumptions of the AS-AD model? The most significant change we make going from IS-LM model to AS-AD model is to allow P to be endogenous. As P was constant in IS-LM model, w

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd