In the Keynesian model, if total planned spending is _______ than the total output produced, employment and output will _______.
A) less; fall
B) less; rise
C) greater; fall
D) greater; remain unchanged

Question

Quizplus · Accepted Answer

In the Keynesian model, if total planned spending is less than the total output produced, it indicates that not all goods produced are being sold, leading to an accumulation of unsold goods. This situation typically causes firms to reduce production, which in turn leads to a decrease in employment and output.

In the Keynesian Model, If Total Planned Spending Is _______