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Suppose that due to technological progress labour requirement per unit
of output is halved in a Simple Keynesian model where output is pro-
portional to the level of employment. What happens to the equilibrium
level of output and the equilibrium level of employment in this case?
Consider a modified Keynesian model where consumption expenditure
is proportional to labour income and wage-rate is given. Does tech-
nological progress produce a different effect on the equilibrium level of
output in this case?
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