Answer to Question #236432 in Macroeconomics for KAT

Question

explain complete Keynesian model with aggregate demand and aggregate supply ?

Answer 1

The Keynesian model claims that the demand is behind its supply. Hence, aggregate demand changes results to employment and real GDP changes. Keynesian zone happens at low output levels on SRAS curve where it becomes fairly flat, therefore aggregate demand movements affect output however have little impact on the level of price.