Which one of the following is the determining factor of Equilibrium Income is the Keynesian Viewpoin...........

Which one of the following is the determining factor of Equilibrium Income is the Keynesian Viewpoint?

Aggregate Demand

Aggregate Supply

Both (a) and (b)

None of the above

- Option 1: Aggregate Demand

- Keynesian theory emphasizes aggregate demand as a key factor.

- It determines total spending and affects income and output.

- Option 2: Aggregate Supply

- While important, aggregate supply is not the main focus in Keynesian economics.

- The theory assumes businesses can meet demand at the current price level.

- Option 3: Both (a) and (b)

- Equilibrium income is determined where aggregate demand meets aggregate supply.

- Keynesians focus on demand but recognize supply constraints.

- Option 4: None of the above

- This option doesn't align with Keynesian theory.

- Both demand and supply interplay to determine equilibrium income.

Correct Answer: Option 3 - Both (a) and (b)

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