Aggregate supply is a business term for the total supply of all the goods and services in an economy. John Keynes made aggregate demand the focus of macroeconomics; however, since the 1970s many economists have questioned the importance of aggregate demand in determining the health of an economy, suggesting instead that governments should concentrate on establishing conditions to encourage the supply of goods and services. This could entail deregulation, encouraging competition, and removing restrictive practices in the labour market. Research Aggregate Supply
In economics, hysteresis refers to the assumption that the present level of an economic variable depends on past levels. For example, when unemployment rises, a new classical economist would expect wages to fall and the demand for labour to rise, so that unemployment would quickly disappear. If there is hysteresis, however, this may not occur since workers, once excluded from the labour market, may lose skills and therefore be unable to compete with employed workers to push down wages. Hysteresis may be thought of as a post- Keynesian theory, which may justify the use of government expenditure to alleviate unemployment. Research Hysteresis
The labour market is a theoretical concept used in macroeconomic analysis and is the market that determines who has jobs and the rate of pay for a particular job. Research Labour Market
The Probert Encyclopaedia was designed, edited and programed by
Matt and Leela Probert
Abbreviations
Research Aggregate Supply
