Describe why we describe labor demand in the classical model as "technologically determined." Explain how preferences between (a) consumption goods purchased with money earned from working and (b) the enjoyment of leisure time affect labor supply. Define full employment in the context of the basic classical model. What key market mechanism leads to full employment in the model? What determines the level of potential output? How does the potential output concept relate to the phrase "tastes, technology, and resources

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Labor Demand and Supply in the Classical Model The classical economic model views labor demand as technologically determined Heres why Focus on Produc... View the full answer