ECON 102 Lecture 15: Fiscal Policies and Monetary Policies
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ECON 102 Full Course Notes
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Econ 102 - principles of macroeconomics - chapter 29 (lecture 15): fiscal policies and. Labor supply and labor leisure tradeoff is an old question. Theory: if their needs are overly met, the workers will slack off. Instead of a straight line (figure 1. ), the labor supply function will actually be a curved line that circles back (figure 2. The traditional real wage vs. labor supply graph. The higher the salary, the more the workers are willing to work. The real real wage rate vs. labor supply graph. When salary exceeds a certain point, the workers work less. The purposes of fiscal policies were to influence people"s personal decisions. Adjust wage rate so they can work more instead going on a vacation to malaysia, for example. Achieve macroeconomics objectives using fiscal policies - ex. to reach full employment, sustained economic growth, and price level sustainability. Most of revenues come from personal income tax.