According of Keynes, the level of employment is determined by ?
Correct answer: D. the level of aggregate demand for goods and services
- A. the behaviour of trade unions.
- B. the quantity of money
- C. price and wages
- D. the level of aggregate demand for goods and services
Explanation
Keynes argued that firms employ workers according to expected sales, so employment is governed by effective aggregate demand for goods and services. Money, wages and trade-union behaviour can influence demand, but they are not the primary determinant in the Keynesian explanation.
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