282 THE GENERAL THEORY OF EMPLOYMENT bk. v

of income. It is reasonable, therefore, further toassume that corresponding to a given level of aggregateeffective demand there is a unique distribution of itbetween different industries.

This enables us to determine what amount of em-ployment in each industry will correspond to a givenlevel of aggregate employment. That is to say, it givesus the amount of employment in each particular in-dustry corresponding to each level of aggregate effectivedemand measured in terms of wage-units, so that theconditions are satisfied for the second form of theemployment function for the industry, defined above,namely N r = F r (D w ). Thus we have the advantagethat, in these conditions, the individual employmentfunctions are additive in the sense that the employmentfunction for industry as a whole, corresponding to agiven level of effective demand, is equal to the sum ofthe employment functions for each separate industry;

F(D w )=N= SN r = EF r (D w ).

Next, let us define the elasticity of employment.The elasticity of employment for a given industry is

, _ ^N r D wr

6 er ~dv; r n ?

since it measures the response of the number of labour-units employed in the industry to changes in thenumber of wage-units which are expected to be spenton purchasing its output. The elasticity of employ-ment for industry as a whole we shall write

Provided that we can find some sufficiently satis-factory method of measuring output, it is also usefulto define what may be called the elasticity of output orproduction, which measures the rate at which output