B Com Exam > B Com Notes > Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment
Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment - B Com PDF Download
Is the equilibrium level of income found only at full employment level?
Ref: https://edurev.in/question/786830/Is-the-equilibrium-level-of-income-found-only-at-full-employment-level-
Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment!
According to the classical economists, equilibrium level of income is attained always at full employment level, i.e. there is absence of involuntary unemployment. However, as per the Keynesian theory, equilibrium level can be achieved at:
(i) Full employment level; or
(ii) Underemployment level, i.e. less than full employment level; or
(ii) Over full employment level, i.e. more than full employment level.
Let us discuss the three possibilities of equilibrium level:
Full Employment Equilibrium:
ADVERTISEMENTS:
It refers to a situation when the aggregate demand is equal to the aggregate supply at full employment level.
1. In Fig. 8.3, E is the full employment equilibrium because aggregate demand ‘EQ’ is equal to full employment level of output ‘OQ’.
2. At OQ level of output, all those who are willing to work at the prevailing wage’ rate, are able to find employment, i.e. there is no involuntary unemployment.
Underemployment Equilibrium:
It refers to a situation when the aggregate demand is equal to the aggregate supply when the resources are not fully employed. It occurs prior to the full employment level.
1. In Fig. 8.4, AD1 = AS at point ‘F which is lower than full employment level.
2. As OQ1 is less than OQ, point ‘F’ signifies the under employment equilibrium.
Over Full Employment Equilibrium:
It refers to a situation when AD is equal to AS beyond the full employment level. It occurs after the full employment level.
1. In Fig. 8.5, AD, = AS at point ‘G’ which is higher than the full employment level.
2. As OQ, is more than OQ, point ‘G’ signifies the over full employment equilibrium.
FAQs on Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment - B Com
| 1. What is the equilibrium level of income? |  |
| 2. What does full employment mean in the context of the equilibrium level of income? | |
Ans. Full employment, in the context of the equilibrium level of income, refers to a situation where all available labor resources in an economy are utilized. It means that there is no involuntary unemployment, and the economy is operating at its maximum potential output level.
| 3. What is underemployment? | |
Ans. Underemployment refers to a situation where individuals are employed, but their skills or qualifications are not fully utilized. It occurs when people are working in jobs that are below their skill level or are working part-time when they desire full-time employment. Underemployment is considered a form of labor market inefficiency.
| 4. What happens when an economy is over full employment? | |
Ans. When an economy is over full employment, it means that the labor resources are fully utilized and there is an excess demand for labor. This can lead to wage inflation as employers compete for the limited supply of labor, resulting in higher wages and potentially higher prices. It may also cause production bottlenecks and inefficiencies in the long run.
| 5. How does the equilibrium level of income relate to economic stability? | |
Ans. The equilibrium level of income is crucial for economic stability as it represents a state of balance in the economy. When the economy is at the equilibrium level of income, there is no pressure for it to either expand or contract. This stability helps to avoid inflationary or recessionary pressures and ensures a sustainable level of economic growth.
Related Exams
About this Document
4.90/5
Rating
Apr 01, 2025
Last updated
Document Description: Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment for B Com 2025 is part of B Com preparation. The notes and questions for Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment have been prepared according to the B Com exam syllabus. Information about Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment covers topics like and Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment Example, for B Com 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises and tests below for Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment.
Introduction of Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment in English is available as part of
our B Com preparation & Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment in Hindi for B Com
courses. Download more important topics, notes, lectures and mock test series for B Com
Exam by signing up for free. B Com: Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment - B Com
Description
Full syllabus notes, lecture & questions for Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment - B Com - B Com | Plus excerises question with solution to help you revise complete syllabus | Best notes, free PDF download
Information about Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment
In this doc you can find the meaning of Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment defined & explained in the simplest way possible.
Besides explaining types of Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment theory,
EduRev gives you an ample number of questions to practice Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment tests, examples and also practice B Com tests.
Related Searches
Over Full Employment - B Com
,Summary
,Extra Questions
,Exam
,Equilibrium Level of Income : Full Employment
,Underemployment
,ppt
,Equilibrium Level of Income : Full Employment
,shortcuts and tricks
,Semester Notes
,Over Full Employment - B Com
,video lectures
,Equilibrium Level of Income : Full Employment
,Over Full Employment - B Com
,Viva Questions
,Free
,practice quizzes
,Important questions
,study material
,Previous Year Questions with Solutions
,Sample Paper
,Objective type Questions
,past year papers
,MCQs
,Underemployment
,mock tests for examination
,Underemployment
;
Additional Information about Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment for B Com Preparation
Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment Free PDF Download
The Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment is an invaluable resource that delves deep into the core of the B Com exam.
These study notes are curated by experts and cover all the essential topics and concepts, making your preparation more efficient and effective.
With the help of these notes, you can grasp complex subjects quickly, revise important points easily,
and reinforce your understanding of key concepts. The study notes are presented in a concise and easy-to-understand manner,
allowing you to optimize your learning process. Whether you're looking for best-recommended books, sample papers, study material,
or toppers' notes, this PDF has got you covered. Download the Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment now and kickstart your journey towards success in the B Com exam.
Importance of Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment
The importance of Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment cannot be overstated, especially for B Com aspirants.
This document holds the key to success in the B Com exam.
It offers a detailed understanding of the concept, providing invaluable insights into the topic.
By knowing the concepts well in advance, students can plan their preparation effectively.
Utilize this indispensable guide for a well-rounded preparation and achieve your desired results.
Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment Notes
Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment Notes offer in-depth insights into the specific topic to help you master it with ease.
This comprehensive document covers all aspects related to Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment.
It includes detailed information about the exam syllabus, recommended books, and study materials for a well-rounded preparation.
Practice papers and question papers enable you to assess your progress effectively.
Additionally, the paper analysis provides valuable tips for tackling the exam strategically.
Access to Toppers' notes gives you an edge in understanding complex concepts.
Whether you're a beginner or aiming for advanced proficiency, Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment Notes on EduRev are your ultimate resource for success.
Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment B Com Questions
The "Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment B Com Questions" guide is a valuable resource for all aspiring students preparing for the
B Com exam. It focuses on providing a wide range of practice questions to help students gauge
their understanding of the exam topics. These questions cover the entire syllabus, ensuring comprehensive preparation.
The guide includes previous years' question papers for students to familiarize themselves with the exam's format and difficulty level.
Additionally, it offers subject-specific question banks, allowing students to focus on weak areas and improve their performance.
Study Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment on the App
Students of B Com can study Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment alongwith tests & analysis from the EduRev app,
which will help them while preparing for their exam. Apart from the Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment,
students can also utilize the EduRev App for other study materials such as previous year question papers, syllabus, important questions, etc.
The EduRev App will make your learning easier as you can access it from anywhere you want.
The content of Equilibrium Level of Income : Full Employment, Underemployment, Over Full Employment is prepared as per the latest B Com syllabus.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup