<Dd> the equality of the real wage to the marginal disutility of employment...realistically interpreted, corresponds to the absence of' involuntary' unemployment . </Dd> <P> Put another way, the full employment and the absence of involuntary unemployment correspond to the case where the real wage equals the marginal cost to workers of supplying labor for hire on the market (the "marginal disutility of employment"). That is, the real wage rate and the amount of employment correspond to a point on the aggregate supply curve of labor that is assumed to exist . In contrast, a situation with less than full employment and thus involuntary unemployment would have the real wage above the supply price of labor . That is, the employment situation corresponds to a point above and to the left of the aggregate supply curve of labor: the real wage would be above the point on the aggregate supply curve of labor at the current level of employment; alternatively, the level of employment would be below the point on that supply curve at the current real wage . </P> <P> Second, in chapter 3, Keynes saw full employment as a situation where "a further increase in the value of the effective demand will no longer be accompanied by any increase in output ." </P> <Dl> <Dd> In the previous chapter we have given a definition of full employment in terms of the behavior of labor . An alternative, though equivalent, criterion is that at which we have now arrived, namely a situation, in which aggregate employment is inelastic in response to an increase in the effective demand for its output . </Dd> </Dl>

How is the level of employment and income determined in a capitalist society