Practicing Success
According to which theory, the equilibrium level of income is determined where planned level of aggregate demand is equal to planned level of aggregate supply? |
Ricardian theory Smith's theory Keynesian theory Robinson's theory |
Keynesian theory |
According to Keynesian theory, the equilibrium level of income is determined where planned level of aggregate demand is equal to planned level of aggregate supply. Income/output/employment are in equilibrium at that level where the AD = AS i.e. aggregate demand is equal to aggregate supply. |