Changes in Output and Employment in the Keynesian Aggregate Expenditure Model

The Catalyst for Output and Employment Changes

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Within the Keynesian aggregate expenditure model, the central catalyst that leads to changes in output and employment is changes in

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A. B. C. D.

Explanation

Aggregate expenditures are the catalyst of the Keynesian model. Until full employment is attained, supply is always accommodative. Increases in aggregate expenditures thus lead to an expansion in both output and employment as long as the economy is operating below potential capacity.

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