In the Keynesian model,equilibrium occurs when
A)the real and nominal interest rates are equal.
B)total spending is equal to current output.
C)the general price level is constant.
D)the money supply is growing at a constant rate.

Question

Quizplus · Accepted Answer

In the Keynesian model, equilibrium occurs when total spending is equal to current output. This is often referred to as the "output or income level equilibrium." The model emphasizes the role of aggregate demand in determining economic activity, and suggests that changes in government spending or taxation can be used to shift aggregate demand and achieve desired levels of output and employment. The other choices (A, C, and D) are not necessarily related to achieving equilibrium in the Keynesian model.

In the Keynesian Model,equilibrium Occurs When