Related to the Economics in Practice on p. 227: In the simple "Keynesian" view, maximum output is not defined by the
A) existing labor force.
B) current capital stock.
C) existing state of technology.
D) level of consumption.

Question

Quizplus · Accepted Answer

In the Keynesian view, maximum output is not defined by the level of consumption, but rather by the level of aggregate demand in the economy. Consumption is just one component of aggregate demand, which also includes investment, government spending, and net exports. Therefore, the level of consumption alone cannot determine maximum output.

Related to the Economics in Practice on P