Re: jnu 2011

Posted by Amit Goyal on May 17, 2012; 4:37pm
URL: http://discussion-forum.276.s1.nabble.com/jnu-2011-tp7503584p7564092.html

Hi Vasudha, :-) Here we go.

Lets proceed by way of contradiction. Suppose at I = 7000, we have less than full employment, then PY = 4(1000 + I) = 32000 (by steps in problems (2) and (3)). This would mean W = 24000. And w = 10 gives us employment, L = 2400. But this exceeds L* = 2000. Hence our assumption is wrong that we have less than full employment at I = 7000. Thus, we have full employment at I  = 7000.