Criteria of choosing a production technique in circumstances of widespread unemployment

Abstract

Selection of generated technique of production at the level of national economy, contributes to balancing available labour resources with investment funds. Techniques, which are more capital consuming, permit to maximize economic surplus which in a short period of time is obtained at the cost of an unemployment increase, whereas during a long period of the time the economic surplus makes the investment fund stronger, which stimulates an economic growth and advances the process of unemployment reduction. The second approach basing on lowering the capital-consuming techniques of production, causes an employment increase on the one hand but a decrease of work efficiency on the other hand. The choice of higher or lower consumption of capital is actually neither a choice of "better" nor "worse" production techniques.