One way to view equilibrium in the simple Keynesian model without government spending and taxes is that:
A)saving equals planned investment.
B)saving equals planned expenditures.
C)saving equals planned autonomous spending.
D)None of the above.

Question

Quizplus · Accepted Answer

In the simple Keynesian model without government spending and taxes, equilibrium is reached when saving equals planned investment. This means that households and firms are saving the same amount that businesses are planning to invest, resulting in a balanced economy.

One Way to View Equilibrium in the Simple Keynesian Model