In the Keynesian model of aggregate expenditure, real GDP is determined by the
A) price level.
B) level of aggregate supply.
C) level of aggregate demand.
D) level of taxes.

Question

Quizplus · Accepted Answer

According to the Keynesian model of aggregate expenditure, real GDP is determined by the level of aggregate demand, as it represents the total level of spending in the economy on goods and services. The level of aggregate supply and the price level may also impact real GDP, but they are not the primary determinants according to this model. The level of taxes may impact households' disposable income and therefore their spending, but they are also not the main determinant of real GDP in the Keynesian model.

In the Keynesian Model of Aggregate Expenditure, Real GDP Is