For the purposes of the Keynesian cross, planned expenditure consists of:
A) planned investment.
B) planned government spending.
C) planned investment and government spending.
D) planned investment, government spending, and consumption expenditures.

Question

Quizplus · Accepted Answer

The Keynesian cross model considers the equilibrium level of GDP at the point where planned expenditure equals actual output. Therefore, planned expenditure in this model consists of all components of aggregate demand, including planned investment, government spending, and consumption expenditures. Therefore, option D is the correct answer.

For the Purposes of the Keynesian Cross, Planned Expenditure Consists