jnu 2011

[aastha]

ques 16 - 22 : let Y: aggregate real output per year , P: price level, C : money value of aggregate consumption expenditure per year, I : money value of agg. investment expenditure per year, L : aggregate employment ( in labour hours per hour),L*: total labour supply(in labour hours per hour) and w:hourly money wage rate. Let W denote the money value of aggregate wage income per year and R the money value of aggregate non wage income per year. Consider an economy in which labour is homogenous, the aggregate productivity of labour (Y/L) is a constant a and the price level(when output is below its full employment level) is a factor m times the wage cost per unit of aggregate output. The price at full employment is always greater than or equal to that at below full employment . In equilibrium , PY= C +I

16. if I=4000, C=1000+.8W+.6R, w=10,m=4/3 , a=16 , L*=2000, what is full employment equilibrium ?
a)125
b)625
c)24000
d)none of the above

please tell me how to go about this question

[anon_econ]

Y/L=a so Y=aL. L=2000 and a=16 will give u Y=16*2000=32000.
I could be wrong. I always have doubts when the answer comes out to be 'none of the above' :P

[aastha]

@vasudha :
even i thought on the same lines . . .:P

[ritu]

In this question has the value of 'R' given implicitly??????
coz no explicit mention has been given of its value....nd without it how can we determine Y..

[anon_econ]

R will be total nominal income less wage income na. Yes, jnu mein bhi ye sab karna hota hai :P

[vaibhavR]

did anybody else made advance on the following part of the question... I tried on many fronts and got a number of answers of each of P and Y ... haha..

I am trying following identities .. can anybody confirm or contradict the below:

PY = W + R
P = m(W/Y)



Moreover, even if Y= 32000, then also how to do the following parts of the question, output when below full employment ??

Whats the value of P you guys are getting ??

[vaibhavR]

bump