Which of these is NOT true regarding the Keynesian model?
A) Aggregate expenditures can be expressed as C + I + G + (X - M).
B) GDP can be measured as the sum of all spending.
C) The four main types of spending are consumer, investment, government, and net exports.
D) Aggregate spending is always less than aggregate income.

Question

Quizplus · Accepted Answer

The statement "Aggregate spending is always less than aggregate income" is not true in the Keynesian model. In fact, one of the main ideas behind Keynesian economics is that during periods of economic downturns, it is possible for aggregate spending to be less than aggregate income, leading to a decrease in overall economic activity.

Which of These Is NOT True Regarding the Keynesian Model