Explain briefly what is the Classical Theory Of Employment.

November 29th, 2009 Comments off
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Classical theory of employment:
Economic thought of the Classical School of economist and based on two fundamental postulates:
  1. The wage will be equal to the marginal product of labor; (represent the demand schedule for labor) and
  2. the utility of the wage when a given volume of labor is employed is equal the marginal disutility of that amount of employment namely the real wages just sufficient or inducing the volume of labor actually employed to be forthcoming (represent the supply schedule of labor)

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