What is effective demand according to keynes

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Reference no: EM131001882

1- What is “effective demand” according to keynes? How can there be a lack of effective demand?

2- How did keynes explain that aggregate production and aggregate spending might not be equal? What happens if aggregate production is greater than aggregate spending?

3- How do keynesians counter the neoclassical argument that, in recession, falling prices will restore demand for goods to the full employment equilibrium point?

4- How does keynes explain inflation?

Reference no: EM131001882

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