According to Keynes, what determines the level of employment and income?
A) aggregate expenditures
B) aggregate savings
C) aggregate supply
D) government spending

Question

Quizplus · Accepted Answer

According to Keynesian theory, the level of employment and income is determined by aggregate expenditures, which refers to the total amount of spending in the economy. Keynes argued that when aggregate expenditures are low, there will be a shortfall in demand for goods and services, leading businesses to reduce production and cut back on employment. Conversely, when aggregate expenditures are high, businesses will need to hire more workers to meet the demand for goods and services, leading to higher employment and income levels.

According to Keynes, What Determines the Level of Employment and Income