In the Keynesian theory,output and employment in the economy depend

Question

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According to Keynesian theory, output and employment in the economy depend directly on the level of total expenditures. Keynes argued that inadequate total expenditures can lead to unemployment and low output, while increased expenditures can stimulate economic growth and create jobs. Therefore, option A is the best choice. Option B is incorrect as Keynesian theory does not assume an inverse relationship between resources and output/employment. Option C is incorrect because while disposable income may influence total expenditures, it is not the only determinant. Option D is also incorrect because the rate of interest is not considered a major determinant of output and employment in the Keynesian theory, although it may have some impact on investment and consumption decisions.

In the Keynesian Theory,output and Employment in the Economy Depend