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Investment's Effect on Unemployment

Question

Analyse how an increase in investment may affect unemployment.

Category:

Unemployment

Frequently asked question

Preview Answer

I. 🍃Introduction
- Explanation of the topic
- Importance of understanding the relationship between investment and unemployment

II. Investment and Unemployment
- Explanation of how investment affects unemployment
- Discussion of the two scenarios: workers and capital goods as substitutes and complements

III. Investment as a Component of Aggregate Demand
- Explanation of how investment affects aggregate demand
- Discussion of how higher investment can reduce cyclical unemployment

IV. Investment and Labour Productivity
- Explanation of how investment can increase labour productivity
- Discussion of how this can make labour more attractive and products more internationally competitive
- Explanation of how this can raise total demand further and encourage firms to expand further

V. 👉Conclusion
- Summary of the main points
- Implications of the relationship between investment and unemployment
- Suggestions for future research.

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