Investment's Effect on Unemployment
Analyse how an increase in investment may affect unemployment.
Frequently asked question
- 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
- Summary of the main points
- Implications of the relationship between investment and unemployment
- Suggestions for future research.
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