The Keynesian equilibrium is defined to be when:
A) planned inventories equal to actual inventories, which leads to national income equal to planned aggregate expenditure.
B) planned investment is equal to domestic consumption.
C) planned inventories equal to actual inventories, which leads to national net income equal to planned aggregate expenditure.
D) planned spending is equal to expected spending from households.

Question

Quizplus · Accepted Answer

The Keynesian equilibrium occurs when planned inventories match actual inventories, which in turn leads to national income being equal to planned aggregate expenditure. This means there is no unplanned accumulation or depletion of inventories, and the economy is operating at an equilibrium level of output where total spending equals total production.

The Keynesian Equilibrium Is Defined to Be When