Answered step by step
Verified Expert Solution
Question
1 Approved Answer
In the General Theory Keynes proposes two key and connected theoretical innovations: 1) aggregate economic activity levels are demand-determined (the Principle of Effective Demand) rather
In the General Theory Keynes proposes two key and connected theoretical innovations: 1) aggregate economic activity levels are demand-determined (the Principle of Effective Demand) rather than supply-side determined; and 2) the general level of interest rates is determined by monetary forces and convention rather than 'real' forces. Outline and critically appraise how the latter theory of interest rates is facilitated by the manner of saving-investment equilibration in the Principle of Effective Demand.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started