Money expenditures on goods and services

Saturday, May 28, 2011

That Full Employment depends upon two main conditions: first, that there are proper demand – management arrangements to ensure an adequate and stable level of money expenditures on goods and services and thus to enable the output of a Fully – Employed economy to find a steady and reliable market; and, second, that the workers who seek employment in a free – enterprise economy, given their skills and qualifications, offer their services at a low enough real price for competing employers to employ them; That this price of labor at the low end of the income scale would in a free market almost certainly be so low as to present a socially undesirable distribution of income; That, combined with the seller’s market for labor implied by an unemployment rate of 2 to 3 per cent, this relatively low wage would almost certainly lead to claims for wage increases on a scale which threatened an explosive inflation;