LEARNING OBJECTIVES
After you have read this section, you should be able to answer the following questions:
What determines the amount of labor in the aggregate production function?
What determines the patterns of labor migration?
Why do real wages differ across countries?
The aggregate production function tells us how much output we get from the inputs that we have available. Our next task is to explain how much of each input goes into this production function. When we have done this, we will have explained the level of real gross domestic product (real GDP). We begin with labor because it is the most familiar—almost everyone has had the experience of selling labor services.
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