Question

The impact of 'Excess Demand' under the Keynesian theory of income and employment, in an economy, is ______

पर्याय

• Decrease in income, output, employment, and general price level.

• Decrease in nominal income, but no change in real output.

• Increase in income, output, employment, and general price level.

• No change in output/employment but an increase in the general price level.

Answer 1

The impact of 'Excess Demand' under the Keynesian theory of income and employment, in an economy, is no change in output/employment but an increase in the general price level.

Explanation:

Excess demand, according to Keynes' theory, has the following effects on output, employment, and the general price level:

1. Output/employment - There is no change.
2. General price level - Price levels rise as a result of excess demand.