In the Keynesian two sector model, when AD = AS, then: A)si C)s=i D)i=0

Name: In the Keynesian two sector model, when AD = AS, then: A)s i C)s=i D)i=0
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Question

In the Keynesian two sector model, when AD = AS, then:
A)s<i
B)s>i
C)s=i
D)i=0

Quizplus · Accepted Answer

In the Keynesian two-sector model, when Aggregate Demand (AD) equals Aggregate Supply (AS), it implies that the economy is in equilibrium. In this state, savings (s) equal investment (i), hence s=i. This equilibrium condition is fundamental to Keynesian economics, reflecting a balance between what is saved and what is invested in the economy.

In the Keynesian Two Sector Model, When AD = AS