According to Keynes, the level of employment is determined by
A) flexible wages and prices.
B) interest rates.
C) price and wages.
D) the level of aggregate demand for goods and services.

Question

Quizplus · Accepted Answer

Keynes argued that the level of employment is determined by the level of aggregate demand for goods and services, which he believed could be influenced by government policies such as fiscal and monetary policy. Flexible wages and prices, as well as interest rates, could play a role in affecting aggregate demand, but they were not the ultimate determinant of employment levels.

According to Keynes, the Level of Employment Is Determined by