Keynes argued that the sum of the components that comprise aggregate demand
A)could add up to an output smaller than the economy is capable of producing,thus resulting in less than full employment.
B)could add up to an output greater than the economy is capable of producing,thus resulting in less than full employment.
C)always equaled the output the economy is capable of producing.
D)equaled the output the economy is capable of producing by definition.

Question

Quizplus · Accepted Answer

Keynes argued that in certain situations, the sum of the components of aggregate demand, namely consumption, investment, government spending, and net exports, could add up to an output smaller than the economy is capable of producing. This is known as a deficiency in aggregate demand which could result in less than full employment.

Keynes Argued That the Sum of the Components That Comprise