Keynes stressed the importance of effective demand which is
A) when business firms are effective in convincing consumers that they have a demand for certain goods.
B) when consumers have the desire for goods and services as well as the income to purchase these goods.
C) when the demand for goods and services is effective in satisfying individuals desires.
D) when aggregate demand is less than aggregate supply.

Question

Quizplus · Accepted Answer

Keynes emphasized that effective demand arises from the desire of consumers to purchase goods and services combined with their ability to pay for them. This means that in addition to having the willingness to buy goods and services, consumers must have the necessary income or purchasing power to actually make those purchases. Effective demand is important because it drives economic growth and is necessary for firms to produce and sell their goods and services, leading to increased employment and income generation.

Keynes Stressed the Importance of Effective Demand Which Is