Equilibrium in the full Keynesian model requires that:
A) all injections (I + G + X) must equal all withdrawals (S + T + M).
B) income exceed expenditures.
C) expenditures exceed income.
D) the government budget be in balance.

Question

Quizplus · Accepted Answer

In the Keynesian model, equilibrium occurs when total injections (investment, government spending, and exports) equal total withdrawals (savings, taxes, and imports), ensuring that the economy is in a state of balance without unplanned changes in inventories.

Equilibrium in the Full Keynesian Model Requires That