The full Keynesian model illustrates the importance of spending in an economy whose investment, government spending, and exports all increase income, while saving, taxes, and imports reduce it.

Question

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The Keynesian model emphasizes that aggregate demand, driven by consumption, investment, government spending, and net exports, determines economic output, while savings, taxes, and imports act as leakages that reduce income.

The Full Keynesian Model Illustrates the Importance of Spending in an Economy