explain all the theories of employment
Answers
Answer:
he theory of Keynes was against the belief of classical economists that the market forces in capitalist economy adjust themselves to attain equilibrium. He has criticized classical theory of employment in his book. Vie General Theory of Employment, Interest and Money. Keynes not only criticized classical economists, but also advocated his own theory of employment.
His theory was followed by several modern economists. Keynes book was published post-Great Depression period. The Great Depression had proved that market forces cannot attain equilibrium themselves; they need an external support for achieving it. This became a major reason for accepting the Keynes view of employment.
The Keynes theory of employment was based on the view of the short run. In the short run, he assumed that the factors of production, such as capital goods, supply of labor, technology, and efficiency of labor, remain unchanged while determining the level of employment. Therefore, according to Keynes, level of employment is dependent on national income and output.
In addition, Keynes advocated that if there is an increase in national income, there would be an increase in level of employment and vice versa. Therefore, Keynes theory of employment is also known as theory of employment determination and theory of income determination
Explanation:
Answer:
as per Keynes theory of of employment, effective demands signifies the money spent on the consumption of goods and services and on investment.
The total expenditure is equal to the national income, which is equivalent To the national output.
therefore, effective demand is equal to total expenditures as well as national income and national output.
The theory of keynes was against the belief of classifical Economists that it the market forces in capitalist economy adjust themselves to attain equilibrium. He has criticized classical theory of employment in his book. Vie General theory of employment, Interest and Money. Keynes not only criticized classical economists, but also advocated his own theory of employment.
His theory was followed by several modern Economists. Keynes book was published post-great depression period. The great depression had proved that market forces cannot attain equilibrium themselves; they need an external support for achieving it. This become a major reason for accepting the keynes view of employment.
THANKING YOU.