MGHC53H3 Lecture : chapter 3
Document Summary
Macroeconomic policy apply to economy-wide goal, such as inflation, unemployment and growth. Deregulation policies designed to create more competition in an industry by allowing prices to be determined b market forces. Privatization transfer or contracting out of services to the private sector. Steep supply curve & upward sloping curve = inelasticity of supply of labour. Relatively flat supply curve = elastic supply of labour. Where a small increase in wages will significantly increase labour supply. Wage, elasticity of supply is measured by the proportional change in labour supplied caused by a proportionate change in wage rates. The same reasoning applies to labour demand steep demand curve = inelastic demand since a small increase in labour demand will cause a relatively large increase in wages. Conversely, a flat (horizontal) demand curve = inelastic demand as a large increase in labour demand will have little impact on wages.
