Keynesian Theory Of Employment Analysis

The researchers make use of the theory of Employability by John Maynard Keynes which is classified into two: The Classical Theory of Employment and the Keynesian theory of employment. The classical theory assumes the prevalence of full employment. The “Great Depression” of 1929 to 1934, engulfing the entire world in widespread unemployment, low output and low national income, for about five years, upset the classical theorist. It applies the standard demand and supply analysis to labor market and treats to unemployment as a phenomenon that arises from the persistence of wages at the level higher than that which clears the market. This results to the rise of Keynesian theory of Employment. According to Keynes (2008), the term classical economics,

It is flexibility of prices and wages which automatically brings about full employment. If there is general over-production resulting in depression and unemployment, prices would fall as a result of which demand would increase, prices would fall as a result of which demand would increase, prices would rise and productive activity will be stimulated and unemployment would tend to disappear. Similarly, the unemployment could be cured by cutting down wages which would increase the demand of labor and would stimulate the activity. Thus, if the prices and wages allowed to move freely, unemployment would disappear and full employment level would be restored. Further, the classical economists treated money as more exchange medium. They ignored its role in affecting income, output and employment. The theory is related to this study because the variable employment which is to be tested in this study was mentioned in the theory and was explained as affected by the economy’s supply and demand movement in terms of prices and

The most serious observation is that majority of problems to Deming; roughly 95% of problems belong to the system and the responsibility of the management while the workers are just trying to do the best job that they can deliver within the constraints of the system. His theory explains that a system is a series of functions or activities sub process (stages-hereafter components) within an organization that work together for its aim. People, materials, methods and equipment’s are the components that form a network in support of common characteristics: purpose, input, process and output (J. Horine, 1993). Purpose determines the thrust and direction of a system input, on the other hand, is characterized as the primary element that motivates an action of a system. Meanwhile, processes are the sequences of work stages that transform inputs to outputs. And output is what the system produces. The theory of Deming is related to this study because variables such as the educational attainment, trainings attended and examinations taken will greatly effect on the employment status of the graduates of