The full Keynesian model illustrates the importance of spending in an economy whose investment, government spending, and exports all increase income, while savings, taxes, and imports reduce it.

Question

Quizplus · Accepted Answer

The full Keynesian model does indeed highlight the impact of various components of spending on an economy's income. Specifically, in this model, increases in investment, government spending, and exports all contribute to higher income, while reductions in savings, taxes, and imports have the opposite effect.

The Full Keynesian Model Illustrates the Importance of Spending in an Economy