Answer to Question #203564 in Macroeconomics for sathwiki

Question

Explain the keynesian theory of employment with income and expenditure approach.

Answer 1

The link between aggregate income and spending is central to Keynes' theory of determining equilibrium real GDP, employment, and prices. Keynes argued that the economy's equilibrium level of production, or real GDP, may not correspond to the natural level of real GDP, using his income-expenditure model