Keynes states that the aggregate demand is ........

Economic Affairs Introduction

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Keynes states that the aggregate demand is:

an increasing function of the level of employment

a decreasing function of the level of employment

a constant function of the level of employment

not related to the level of employment

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Explanation:

Keynes argued that the relationship between aggregate demand and employment is reciprocal. According to Keynesian economics, aggregate demand influences employment and income levels, and changes in employment can, in turn, impact aggregate demand. Hence, Keynes states that the aggregate demand is a decreasing function of the level of employment.