English

The principle of effective demand is mainly used to explain ______.

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Question

The principle of effective demand is mainly used to explain ______.

Options

  • How prices are determined

  • How much employment exists in an economy

  • How money supply is controlled

  • How foreign trade is balanced

MCQ
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Solution

The principle of effective demand is mainly used to explain how much employment exists in an economy.

Explanation: 

Keynes used the principle of effective demand to explain the level of employment in the economy.

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