In the simple Keynesian model, the only two things one can do with one's income are
A) pay taxes and spend it.
B) spend it and save it.
C) spend it and invest it.
D) save it and give it away.

Question

Quizplus · Accepted Answer

In the simple Keynesian model, individuals only have the choice to either spend their income or save it. While paying taxes and investing are important economic activities, they are not options that individuals can directly control with their income in the simple Keynesian model. The best choice would be to balance spending and saving, as excessive spending can lead to inflation while excessive saving can result in decreased demand and potential recession.

In the Simple Keynesian Model, the Only Two Things One