Hello there, at 4:20 shouldn't the shift in Full Employment mean a shift in productive capacity rather than what you mentioned: a shift in cop? As shift COP does not shift the Full Employment level. Thank you so much for these videos, they're great!
Yes, so it depends on which way you want to phrase it. When there is a rise in COP, firms will cut back on FOP such as labour so this leads to a fall in derived demand for labour hence employment levels will fall (thus the fall in Full employment level). At the same time, this leads to a fall in productivity (lesser FOP) hence a fall in output levels thus productive capacity. So either way works, depends on how you want to explain and phrase it. Best is to explain both!
Hello there, at 4:20 shouldn't the shift in Full Employment mean a shift in productive capacity rather than what you mentioned: a shift in cop?
As shift COP does not shift the Full Employment level.
Thank you so much for these videos, they're great!
Yes, so it depends on which way you want to phrase it. When there is a rise in COP, firms will cut back on FOP such as labour so this leads to a fall in derived demand for labour hence employment levels will fall (thus the fall in Full employment level). At the same time, this leads to a fall in productivity (lesser FOP) hence a fall in output levels thus productive capacity. So either way works, depends on how you want to explain and phrase it. Best is to explain both!