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

Economics of scale exist, This economics of scale exist for all of the foll...

This economics of scale exist for all of the following reasons except: a. bureaucratic inefficiencies b. management problems c. failures in information flows d. firm size is to

Circular flow of income, Discuss how income flows in governed economy, frug...

Discuss how income flows in governed economy, frugal economy, spend their economy.

Fact that price and quantity, The fact that price and quantity demanded are...

The fact that price and quantity demanded are related negatively illustrates the? a. law of supply b. law of quantity supply c. law of demand d. law of quantity demande

Explain the money market diagram, Q. Explain the Money market diagram? ...

Q. Explain the Money market diagram? Let's begin by studying the money market when GDP is given. When Y is given, MD will only rely (negatively) on R and we can draw a figure w

Determine the categories of finished goods, Determine the categories of fin...

Determine the categories of finished goods Finished goods in the goods market are divided into 4 categories: private consumption going to private sector, public consumption for

The three-year period of inflation annually, The GDP deflator in Economy la...

The GDP deflator in Economy land is 200 on January 1, 2010. The deflator rises to 242 by January 1, 2012, and to 266.2 by January 1, 2013. a. What is the annual rate of inflati

Standard deck of playing cards, Suppose you are dealt two cards from a stan...

Suppose you are dealt two cards from a standard deck of playing cards. a) What is the probability of being dealt a pair of aces? b) There are 13 possible pairs possible (Aces throu

Monetrary policy, draw a diagram that explains how interest rate sare deter...

draw a diagram that explains how interest rate sare determined in the keynesian macroeconomic model

Explain the determinants of transaction demand, Macro Economics 1. How...

Macro Economics 1. How was the Classical Theory of interest role criticized by Keynes? 2. Illustrate the barter system that was used in early times in lieu of money. 3.

Hurricane or flood or a pandemic strikes, When a hurricane or flood or a pa...

When a hurricane or flood or a pandemic strikes a country, who is most likely to respond first?

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