1. Problem of Unemployment

The classical economists the pioneers of macroeconomics believed in full employment, I.e., all the resources f the economy are fully employed in accordance with their capabilities. The labor force in the economy is fully employed, hence there is no possibility of unemployment in the country. The classical economists presented as well as proved their theory of full employment with the help of goods market, labor market, money market and credit market. According to classical economists, market forces operate in such a way that full employment is restored automatically.

But such utopia of full employment could not exist for ever. The Great Depression of 1930’s brought about a lot of miseries in the form of slump and vast unemployment when millions of people were wandering in the streets of London and New-York in search of jobs. J.M Keynes wrote his book  General Theory’ in 1936 where he rejected the philosophy of full employment. According to Keynes equilibrium level f national income may be at full employment, at above full employment, and at below full employment, and at below full employment. Thus, according to Keynes, a capitalist economy may even experience unemployment. The unemployment which rose during the 1930’s is attributed t deficiency of aggregate demand. During the 1930’s Great Depression, unemployment rose as a major macroeconomic problem. To remove the unemployment Keynes suggested for state Intervention. He stressed upon printing of new money and enhancing the job opportunities by introducing public works programs. This means that unemployment, according to Kernes, can be removed with the help of deficient budgets on the part of the government. In order to see more about unemployment, its types and measures to remove it.

  1. Problem of inflation

During the 1930’s, the phenomenon of unemployment got a lot of attraction. Therefore, most of the policy experts offered their thoughts to remove unemployment. As a result, the government intervention was legitimized against the traditional Laisseze-Fair of the classical economists. The government expenditure went on increasing to enhance employment; to provide social security; and to provide better social and economic services etc. The state intervention encourage the growth of public sector and public spending. In this situation the normal budgets of the governments were inadequate. So the governments had to restore the deficient financing. This state of affairs led to enhance aggregate demand in the economy. The increased demand for goods and services due to population growth also encouraged aggregate demand. The ruthless craze to get economic superiority and remove unemployment the industrialization was also considered something necessary. In this way, the investment expenditures also increased. Thus, during 1950 to 1970, the greater increases in public savings, private spending and investment spending greatly pushed the aggregate demand in the economy. With this the phenomenon of Demand pull inflation was observed. In the first half of 1970’s, consequent upon certain supply shocks like oil crises etc. The aggregate supplies declined-unable to match the rising demand. In this way the costs of production and prices increased along with reduced production and employment. As a result, a situation of inflation coupled with unemployment was observed in the world-which was given the name of “ Cost-Push Inflation”. During the 1970’s and even till the present time the phenomena of rising inflation and rising unemployment is commonly observed throughout the world. Meanwhile, in the economic literature a bitter reality was inflation and unemployment. It means that if any economy wants to reduce the level of unemployment, it will have to accept the rise in price level.

Thus, we find that the most of the macroeconomics, at present, deals with the problems of unemployment and inflation. To remove these problems or attain economic stabilization, Fiscal and Monetary Policies’ were advocated.

  1. Problem of Growth

In the late 50’s and in the early 60’s the problem of growth got a lot of attraction. It means that the poor and developing countries of the world wish to attain a rise in their real national and per capita incomes. Again, the developed countries of the world who have attained greater rise in their national and per capita incomes wish to maintain them in the presence of rise in their national and per capita incomes wish to maintain them in the presence of rise in capital, rise in labor and change in technology etc. It means that this has been a matter of great concern for the recent economists that what should be the level of rise in investment that mature economies could maintain their attained levels will result in the fuller utilization of change in labor force, change in capital accumulation and change in level of income. Accordingly, in this regard the post Keynesian economists have presented a lot of Growth Models’ as ‘Harrod-Domar model’, ’Solow-Swan model’, ‘Meade Model’, ‘Kaldor model’ and ‘Mrs. Joan Robinson model,’ etc.

Thus, now a day’s macroeconomics deals with the problems of growth – a situation far above the full employment. It is reminded that full employment and growth are not synonyms. Full employment means the maximization of output and employment in the presence of existing resources while economic growth is attached with potential increase in output and employment in the presence of increase in capital, increase in labor force, increase in natural resources and technological change. The full employment corresponds to the existing production frontier of the economy while economic growth has the effect of shifting the production frontier of the economy while economic outward.


  1. June 11, 2017 at 3:36 pm

    Entre nosotros hablando.
    Rexuiz FPS Game

  2. June 22, 2017 at 10:10 pm

    I simply want to say I am beginner to weblog and absolutely enjoyed this web-site. Probably I’m planning to bookmark your site . You actually have remarkable article content. Thanks for sharing with us your web-site.

  3. June 29, 2017 at 12:19 am

    Hello there, I discovered your blog by way of Google while searching for a related matter, your site got here up, it looks good. I have bookmarked it in my google bookmarks.

  4. June 30, 2017 at 8:35 am

    My partner and I stumbled over here different page and thought I might check things out. I like what I see so now i’m following you. Look forward to checking out your web page for a second time.

  5. June 30, 2017 at 5:52 pm

    Perfectly written written content , thankyou for entropy.

  6. July 1, 2017 at 12:11 pm

    Might be mostly unattainable to encounter well-updated visitors on this subject, then again you appear like you comprehend those things you’re talking about! Excellent

  7. July 1, 2017 at 6:18 pm

    Hey just wanted to give you a brief heads up and let you know a few of the pictures aren’t loading correctly. I’m not sure why but I think its a linking issue. I’ve tried it in two different browsers and both show the same results.

  8. July 2, 2017 at 2:27 am

    Absolute significant suggestions you have remarked, thanks so much for submitting.

  9. July 2, 2017 at 2:21 pm

    What i don’t realize is in truth how you are no longer really much more smartly-preferred than you might be now. You are so intelligent. You realize therefore significantly relating to this matter, produced me in my opinion imagine it from numerous numerous angles. Its like men and women don’t seem to be interested unless it’s something to accomplish with Girl gaga! Your own stuffs great. Always handle it up!

  10. July 3, 2017 at 7:24 am

    Hi there! Do you use Twitter? I’d like to follow you if that would be okay. I’m undoubtedly enjoying your blog and look forward to new posts.

  11. July 3, 2017 at 8:48 am

    hello!,I really like your writing so a lot! percentage we be in contact more approximately your article on AOL? I need a specialist on this area to unravel my problem. Maybe that is you! Looking ahead to peer you.

  12. July 3, 2017 at 11:21 am

    I’ve learn a few good stuff here. Certainly value bookmarking for revisiting. I surprise how so much effort you place to create any such fantastic informative website.

  13. July 3, 2017 at 1:03 pm

    Some genuinely nice and useful information on this site, also I conceive the style contains excellent features.

  14. July 4, 2017 at 4:11 am

    Whoa! This blog looks exactly like my old one! It’s on a entirely different topic but it has pretty much the same layout and design. Outstanding choice of colors!

  15. go
    July 4, 2017 at 9:49 am

    This is suitable day to get some goals for the long run. I have read this posting and if I have the ability to, I desire to suggest to you you few intriguing advice.

  16. July 4, 2017 at 6:46 pm

    Hi there! This post could not be written much better! Reading through this article reminds me of my previous roommate! He constantly kept talking about this. I am going to send this information to him. Pretty sure he will have a very good read. Many thanks for sharing!

  17. July 4, 2017 at 8:03 pm

    Heya i’m for the first time here. I came across this board and I find It really useful & it helped me out much. I hope to give something back and help others like you helped me.

  18. July 5, 2017 at 1:13 am

    I simply could not depart your website before suggesting that I actually enjoyed the standard information an individual provide for your guests? Is going to be back regularly to investigate cross-check new posts

  19. July 5, 2017 at 5:07 am

    I will immediately clutch your rss feed as I can not in finding your email subscription hyperlink or e-newsletter service. Do you have any? Please let me understand in order that I may subscribe. Thanks.

  20. July 5, 2017 at 7:45 am

    I like the helpful information you provide in your articles. I will bookmark your weblog and check again here frequently. I’m quite certain I will learn many new stuff right here! Best of luck for the next!

  21. July 5, 2017 at 8:02 am

    I dugg some of you post as I cogitated they were extremely helpful invaluable

  22. July 5, 2017 at 10:40 am

    I simply couldn’t go away your site prior to suggesting that I extremely loved the usual information an individual supply to your visitors? Is going to be again incessantly in order to inspect new posts

    1. February 21, 2018 at 9:15 am

      [url=][/url] brostept , Student DriverJ717 8 inch driver’s education Sticker decal

    2. March 31, 2018 at 3:31 pm

      [url=][/url] Immatokartexpogue, The Key Elements of Great Chiropractors

  23. July 5, 2017 at 12:52 pm

    I just wish to notify you that I am new to putting up a blog and extremely enjoyed your review. Very likely I am likely to save your blog post . You truly have stunning article content. Admire it for giving out with us your main url article

  24. July 5, 2017 at 12:55 pm

    Dead indited articles , thanks for information .

  25. July 5, 2017 at 1:06 pm

    Simply wanna input on few general things, The website style and design is perfect, the subject matter is rattling fantastic. “The sun sets without thy assistance.” by The Talmud.

  26. July 5, 2017 at 2:12 pm

    I genuinely enjoy looking at on this internet site , it has got good posts . “He who sees the truth, let him proclaim it, without asking who is for it or who is against it.” by Henry George.

  27. July 5, 2017 at 9:56 pm

    What i don’t realize is in fact how you’re not really a lot more neatly-favored than you may be right now. You are so intelligent. You recognize thus significantly with regards to this matter, made me individually consider it from so many various angles. Its like men and women aren’t fascinated unless it is one thing to do with Lady gaga! Your individual stuffs nice. All the time take care of it up!

  28. July 6, 2017 at 6:18 am

    Thanks, I’ve just been looking for information approximately this topic for ages and yours is the greatest I’ve came upon till now. But, what concerning the conclusion? Are you sure about the supply?

  29. July 6, 2017 at 11:07 am

    As a Newbie, I am permanently searching online for articles that can help me. Thank you

  30. July 6, 2017 at 2:18 pm

    magnificent points altogether, you simply gained a new reader. What may you suggest in regards to your publish that you just made a few days in the past? Any sure?

  31. July 7, 2017 at 1:56 am is a site with many hypnosis downloads. Whether you are looking for free hypnosis downloads, self hypnosis download for mp3, video and any audio files, Michael Jemery has the downloads for you. You can download hypnosis from apps, audio, mp3 and even youtube !

  32. July 7, 2017 at 6:40 am

    Very well written post. It will be useful to anybody who usess it, as well as myself. Keep doing what you are doing – i will definitely read more posts.

  33. July 7, 2017 at 7:04 am

    Cursos masajes para toda la gente de todas las edades.

    1. March 23, 2018 at 12:02 pm

      [url=][/url] Immatokartexpogue , NICOLE&DORIS Elegant Stilvoll Damen Handtaschen

    2. March 26, 2018 at 6:48 pm

      [url=][/url] Immatokartexpogue , Rootology Breathe Free 120 Capsules

  34. July 7, 2017 at 10:05 am

    Emeryeps is a SEO(Search Engine optimzation) and Internet Marketing company. They help businesses to get traffic from various search engine and online community. They have seo experts and consultants with many years of SEO Experiences. No matter where your business is located, can help your business to secure your highly convertible leads online.

  35. July 7, 2017 at 11:27 am

    I definitely wanted to type a simple comment to say thanks to you for some of the wonderful techniques you are posting on this website. My prolonged internet look up has finally been paid with extremely good concept to write about with my relatives. I would declare that many of us readers are definitely lucky to be in a notable website with very many perfect people with great methods. I feel quite privileged to have used your entire site and look forward to tons of more fun moments reading here. Thanks once more for a lot of things.

  36. July 7, 2017 at 7:52 pm

    Hi! Someone in my Facebook group shared this website with us so I came to take a look. I’m definitely enjoying the information. I’m book-marking and will be tweeting this to my followers! Wonderful blog and great design.

  37. July 8, 2017 at 3:44 am

    I gotta favorite this internet site it seems handy very useful

  38. July 8, 2017 at 8:42 am

    I believe you have mentioned some very interesting points , regards for the post.

  39. July 8, 2017 at 8:49 am

    Thanks so much for giving everyone an extremely nice possiblity to discover important secrets from this web site. It’s usually so brilliant and also packed with amusement for me and my office friends to search your website really 3 times in one week to see the latest guidance you have got. Of course, I am also usually fascinated for the eye-popping solutions you serve. Some 1 areas on this page are absolutely the very best I have ever had.

  40. July 8, 2017 at 8:58 am

    Hey There. I found your blog using msn. This is a very well written article. I will make sure to bookmark it and come back to read more of your useful information. Thanks for the post. I’ll definitely comeback.

  41. July 8, 2017 at 3:10 pm

    I will right away seize your rss feed as I can not find your e-mail subscription hyperlink or e-newsletter service. Do you’ve any? Kindly let me know so that I may just subscribe. Thanks.

  42. July 8, 2017 at 6:40 pm

    I carry on listening to the rumor talk about receiving free online grant applications so I have been looking around for the most excellent site to get one. Could you tell me please, where could i find some?

  43. July 8, 2017 at 7:04 pm

    I loved as much as you’ll receive carried out right here. The sketch is attractive, your authored material stylish. nonetheless, you command get bought an edginess over that you wish be delivering the following. unwell unquestionably come further formerly again since exactly the same nearly a lot often inside case you shield this hike.

  44. July 9, 2017 at 12:31 am

    Hello very cool website!! Man .. Beautiful .. Wonderful .. I’ll bookmark y