What is the need to study a production function, in the classical model analysis in macroeconomics?

Economics Dec 14, 2020

Expert Solution

The study of the classical model in macroeconomics includes the study of production functions. Production functions express the relationship between different combinations of inputs with the quantity of output produced. The model includes the study of the labor market in which the equilibrium wages are determined. Equilibrium wages are determined through the demand and supply of labor curves. The point of equilibrium labor then determines the equilibrium output through the use of production function.

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