Full employment equilibrium
This is the level at Net National Income at which everyone who wants to work is able to. There is in other words sufficient demand to employ everyone. Classical economists argued that the economy would automatically tend to this equilibrium, whereas Keynesians said that it was the role of government, through their policy, to ensure we got there. |
Similar financial terms
Full disclosureThe principle of providing to investors all information required to make informed buying decisions, normally applied to new listings and specifically to information included in the prospectus.
Unemployment rate
The ratio of the number of people classified as unemployed to the total labor force.
Frictional unemployment
Sometimes called transitional, this occurs when unemployed workers are temporarily without a paid occupation while moving from one job to another. There are other frictions in the labor market that prevent it working smoothly e.g. lack of knowledge about available jobs. When somebody loses their job (or chooses to leave it), they will have to look for another one. If they are lucky they find one quite quickly, but they may be unlucky and it may take some time. On average it will take everybody a ...
Equilibrium price
The price when the supply of goods matches demand.
Equilibrium market price of risk
The slope of the capital market line (CML). Since the CML represents the expected return offered to compensate for a perceived level of risk, each point on the line is a balanced market condition, or equilibrium. The slope of the line determines the additional expected return needed to compensate for a unit change in risk. The equation of the CML is defined by the Capital Asset Pricing Model (CAPM).
