Which of the following is the primary source of changes in output within the framework of Keynesian analysis?
A) changes in the price level
B) changes in aggregate demand
C) changes in interest rates
D) changes in wage rates

Question

Quizplus · Accepted Answer

In the framework of Keynesian analysis, changes in output are primarily determined by changes in aggregate demand. Specifically, when aggregate demand increases, output increases and when aggregate demand decreases, output decreases. This is because Keynesian theory emphasizes the importance of consumer and business spending in driving economic activity. Changes in the price level, interest rates, and wage rates may also impact output, but their effects are typically viewed as secondary to changes in aggregate demand.

Which of the Following Is the Primary Source of Changes