Monday, 30 April 2018

ABSTRACT WE WILL START THIS ARTICLE BY DEVELOPING A CLEAR UNDERSTANDING OF THE TERMS AGGREGATE SUPPLY AND EMPLOYMENT STARTING OFF WITH AGGREGATE SUPPLY TO UNDERSTAND ITS TERMINOLOGIES AND THE FACTORS THAT ARE RESPONSE INCLINE OR DECLINE, ALONG WITH AGGREGATE SUPPLY CURVE AND UNDERSTANDING IT, THEN COMING THE TERM “EMPLOYEES” AND WHO ARE THEY BEFORE CONCLUDING EVERYTHING WE WILL DRAW A CLEAR CUT RELATIONSHIP BETWEEN AGGREGATE SUPPLY ON THE EMPLOYEES. STARTING WITH THE TERM AGGREGATE SUPPLY (AS) IT IS DEFINED AS THE TOTAL AMOUNT OF GOODS AND SERVICES (REAL OUTPUT) PRODUCED AND SUPPLIED BY AN ECONOMY’S FIRMS OVER A PERIOD OF TIME.



IT OTHER WORDS IT IS MEASURE OF VOLUME OF GOODS AND SERVICES PRODUCED EACH YEAR. THIS SUPPLY REPRESENTS THE ABILITY OF A CERTAIN ECONOMY TO PRODUCE AND DELIVER GOODS AND SERVICES TO MEET THE DEMAND.
IT CAN ALSO BE SAID THAT IS THE MEASURE OF ONE’S STATE OR NATION’S ABILITY TO PRODUCE GOODS AT EVERY PRICE LEVELS THAT IS USUALLY DESCRIBED IN A GRAPHICAL FORM. THE COMPONENTS (GOODS) THAT AGGREGATE SUPPLY CONSISTS OF ARE CONSUMER’S GOODS PRIVATE CONSUMER GOODS PRIVATE CONSUMER GOODS LIKE MOTOR VEHICLES, CLOTHES AND ENTERTAINMENT ARE SUPPLIED BY PRIVATE SECTOR. FOR A DEVELOPED ECONOMY THIS THE SINGLE LARGEST COMPONENT OF THE AGGREGATED SUPPLY.

CAPITAL GOODS SUCH AS MACHINERY EQUIPMENT AND PLANTS ARE SUPPLIED TO VARIOUS FIRM, THESE ARE SIGNIFICANT FOR IN ORDER TO INCREASE IN ECONOMY ABILITY TO SUPPLY GOODS TO THE PRIVATE SECTORS. PUBLIC AND MERIT GOODS GOOD AFTER GOING THROUGH THE TYPES OF GOODS THAT ARE INCLUDED IN THE AGGREGATED SUPPLY LETS GO OVER THE MAJOR FACTOR THAT AFFECTS THE AGGREGATED SUPPLY ALSO KNOWN AS “CETRIS PARIBUS”  THAT DEFINES THE NATIONS/STATE SUPPLY ARE THE PRICE OF THE GOODS, HAVING A MEASURE EFFECT ON THE SUPPLY OF A CERTAIN GOODS RELATED TO THEIR DEMANDS, FOR EXAMPLE IF THE PRICE OF A COMMODITY IS TOO HIGH ITS DEMAND WILL CERTAINLY BECOME LOW, SIMILARLY IF THE PRICE WILL ALSO BE MORE, THUS THE COMMODITY HAVING THE HIGHEST DEMAND WILL BE PRODUCED IN ABUNDANCE RELATIVE TO THE ONE HAVING LESSER DEMAND.

THE MORE THE PRODUCTION THE MORE THE INCREASE IN THE NATIONS AGGREGATED SUPPLY ARE THE PRICE OF LABOR FORCE, LABORS ARE A CRUCIAL PART OF ANY ORGANIZATION WITHOUT WHICH THE PRODUCTION CAN BE COMPLETELY PARALYZED, HOWEVER HAVING MORE LABORS DOESN’T ALWAYS MEAN THAT THE COMPANY WILL PROSPER IN ITS HAVING EXTRA WORK FORCE IS ALWAYS BETTER AND IT INCREASES THE OVERALL PRODUCTION, THUS IN TURN INCREASING THE OVERALL SUPPLIES BUT THE WAGES OF THE LABOR ALSO COMES INTO PLAY IF THE COMPANY STARTS OVER HIRING PEOPLE THEY WILL ALSO HAVE TO PAY EXTRA AND WILL HAVE TO RESORT TO INCREASING THE PRICE OF THEIR SUPPLY TO MEET THE EXPENSES.

PAYING MORE EXTRA WAGES IS ALSO NOT GOOD AS IT ALSO DECREASES PRODUCTION AND INCREASES EXPENSE, SO EVERY THEIR SUPPLY, WHICH BENEFICIAL FOR THE OVERALL AGGREGATED SUPPLY. PRICE OF INPUT, THE COST OF RAW MATERIALS LIKE STEEL, IRON ETC. OR THE EXPENSE OF ENERGY AND GRS REQUIRED FOR IN ORDER TO MANUFACTURE A CERTAIN PRODUCT ALSO PLAYS A KEY ROLE IN DETERMINING THE OUTPUT OF A SUPPLY, FOR EXAMPLE IF THE COST OF RAW MATERIAL IS HIGH SO DOES THE COST OF PRODUCTION THUS LIMITING PRODUCTION, BUT WHEREAS IF FOR SOME REASON THE COST OF RAW MATERIAL LIKE OIL AND FUEL DECREASES THUS IN THAT CASE THE PRODUCTION WILL INCREASE BECAUSE OF THE LOW PRODUCTION COST.

THUS IT STATES THAT THE HIGHER THEN TECHNOLOGY, THIS IS ONE OF THE MOST IMPORTANT FACTORS IN ITSELF AND CAN HAVE A SIGNIFICANT INCREASE IN THE SUPPLY DEPENDING ON THE ADVANCEMENTS AND IMPROVEMENTS IN THE OVERALL EFFICIENCY OF THE PRODUCTION. HAVING NEWER TECHNOLOGY IN PLAY NOT ONLY INCREASES THE OVERALL EFFICIENCY BUT ALSO REDUCES THE WORK TIME FOR PRODUCTION THUS INCREASING SUPPLIES, ALSO USING TECHNOLOGY MANY PROCESSES CAN BE AUTOMATED CUTTING DOWN LABOR COST AND INCREASING PRODUCTION. THUS WE CAN SAY THAT AN INTRODUCTION OF NEWER MUCH MORE ADVANCEMENT IN TECHNOLOGY IS ALWAYS GOOD FOR INCREASING THE AGGREGATED SUPPLY.

THE VALUE OF CAPITAL STOCK, IT IS THE AMOUNT OF MONEY AVAILABLE IN AN ECONOMY FOR IN ORDER TO INVEST IN BUSINESS TO PURCHASE THE NECESSARY ITEMS USED FOR PRODUCING GOODS AND RESELLING THEM FOR FUTURE PROFITS, THUS MULTIPLYING THE CAPITAL STOCKS. USING A CAPITAL STOCK, THE PRODUCING BUSINESS CAN INVEST IN BUYING MORE EFFICIENT MACHINERIES AND PAY FOR MORE WORKERS FOR IN ORDER TO INCREASE THEIR PRODUCTIONS.

 HAVING A GOOD CAPITAL STOCK IS THE AIM OF EVERY ECONOMY TRYING TO PROSPER, WITHOUT WHICH THE INVESTMENT GOES DOWN AND PRODUCTION SLOWS. SO IN SHORT KEEPING A GOOD CAPITAL STOCK FOR INVESTMENTS IS NECESSARY FOR INCREASE IN AGGREGATE SUPPLY FOR A NATION, AS IT DECREASES SO DOES THE AGGREGATE SUPPLY AGGREGATE SUPPLY CURVE AFTER GOING OVER THE FACTORS THAT AFFECT THE AGGREGATE SUPPLY NOW LET’S HAVE A LOOK AT ITS SUPPLY CURVES, WHICH SHOWS THE QUANTITY OF GOODS AND SERVICES PRODUCED BY THAT NATION OR ITS SUPPLIERS.

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