Answer to Question #316550 in Microeconomics for golu

Question

What according to Keynes are the components of aggregate demand? Describe how equilibrium output is determined in the simple Keynesian model

Answer 1

Answer.

According to Keynes ,the components of aggregate demand are consumption, net exports,govern spending and investment.

Equilibrium output as per Keynesian model is determined when aggregate demand curve intersects the supply curve.In simple words,income on each point equals output at aggregate.