Page 1 - lesson note -Income Determination and Multiplier-44
P. 1

SAI INTERNATIONAL SCHOOL


                                                 ECONOMICS



                                                     Class-XII


                                                  CHAPTER 8


                                Income determination and multiplier


                                                   (Module- 44)


               TOPICS TO BE COVERED-


               -Full employment equilibrium

               - Under full employment equilibrium

               -Over full employment equilibrium

               - short run fixed price analysis of product market



               Possibility of Employment Level: -



               Full employment equilibrium: -
                       It refers to a situation when the aggregate demand is equal to
                       aggregate supply at full employment level.
                                               Y

                                                                              AS
                                AD /AS

                                                          E                        AD



                                                                                         X
                                       O                      
                                                               
                                                                      Income/output/employment

                       In the above diagram AD and AS curve intersect each other at point E
                       which is full employment equilibrium that is all those who are willing to
                       work at the prevailing wage rate are able to find employment.
   1   2   3   4