Question

According to the Keynesian model, the increase in autonomous spending leads to a “multiplied” effect on equilibrium output because higher autonomous spending increases inventory accumulation that causes firms to increase production to reach a higher equilibrium level of output. A) True B) False

Name: according to the keynesian model the increase in autonomous spending leads to a multiplied effect on equilibrium output because higher autonomous spending increases inventory accumulation that cause 2
Uploaded: 2024-01-31T11:23:30-08:00
Duration: 1 min 21 s
Channel: Roee Shalom
Description: according to the keynesian model the increase in autonomous spending leads to a multiplied effect on equilibrium output because higher autonomous spending increases inventory accumulation that cause 2

          According to the Keynesian model, the increase in autonomous spending leads to a
“multiplied” effect on equilibrium output because higher autonomous spending increases
inventory accumulation that causes firms to increase production to reach a higher equilibrium
level of output.
A) True
B) False

Added by Stephen C.

The Economics of Money, Banking, and Financial Markets

Frederic S. Mishkin 11th Edition

Chapter 24

Instant Answer

Solved by Expert Roee Shalom

01/31/2024

Step 1

The Keynesian model of economics suggests that in the short run, especially during recessions, economic output is strongly influenced by aggregate demand (total spending in the economy). According to this model, changes in aggregate demand, whether from consumer Show more…

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According to the Keynesian model, the increase in autonomous spending leads to a “multiplied” effect on equilibrium output because higher autonomous spending increases inventory accumulation that causes firms to increase production to reach a higher equilibrium level of output. A) True B) False