Use the accompanying figure to explain the following two statements: (a) According to Keynes, aggregate demand may

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Use the accompanying figure to explain the following two statements:

(a) According to Keynes, aggregate demand may be insufficient to bring about the full-employment output level (or Natural Real GDP).
(b) A decrease in consumption (due to increased saving) is not matched by an increase in investment spending.

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Economics

ISBN: 978-1285738321

12th edition

Authors: Roger A. Arnold

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Question Posted: Feb 12, 2016 07:21 AM

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Use the accompanying figure to explain the following two statements: (a) According to Keynes, aggregate demand may

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a The economy is at equilibrium at point 2 in the figure This point however is below the ...View the full answer

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