In the simple Keynesian model,equilibrium aggregate output is determined by
A)aggregate demand.
B)aggregate supply.
C)the national demand for labor.
D)the price level.

Question

Quizplus · Accepted Answer

In the simple Keynesian model, equilibrium aggregate output is determined by aggregate demand, which is the total amount of goods and services that households, businesses, and the government are willing and able to buy at a given price level. The model assumes that at the full-employment level of output, aggregate demand equals aggregate supply, and any deviation from this level results in a change in inventories and a corresponding adjustment in output. Thus, the equilibrium level of output is determined by the level of aggregate demand.

In the Simple Keynesian Model,equilibrium Aggregate Output Is Determined by