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According to the lectures, which of the following ideas are representative of orthodox theory, which are representative of heterodox theory, and which are shared by
According to the lectures, which of the following ideas are representative of orthodox theory, which are representative of heterodox theory, and which are shared by both theories? Question 10 options: Demand, particularly intended investment, drives supply In equilibrium, aggregate demand (total planned spending) must equal output and income Savings equals investment in equilibrium (ignoring government or foreign sector) Saving is a leakage out of, and investment is an injection into, the spending flow The paradox of thrift "In the long run, we're all dead" Supply creates its own demand Capitalist economies will normally fail to reach full employment due to insufficient aggregate demand Output, income, and employment fall when money saved exceeds intended investment, until savings equals investment The loanable funds market Investment and savings are primarily functions of the rate of interest Interest rates fall when money saved exceeds the demand for those funds for investment, until savings equals investment Capitalist economies tend to full employment, at least in the long run
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