Question:
To arrive at the value of equilibrium level of income, there must exist an equality between ex-ante ....... and ex-ante .......
To arrive at the value of equilibrium level of income, there must exist an equality between ex-ante ....... and ex-ante .......
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In Keynesian economics, the equilibrium level of income occurs when aggregate demand equals aggregate supply, which is also when savings equals investment.
Updated On: Jun 19, 2025
- Aggregate Demand, Aggregate Supply
- Aggregate Demand, Savings
- Aggregate Demand, Investment
- Savings, Investment
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The Correct Option is D
Solution and Explanation
In order to determine the equilibrium level of income, the ex-ante aggregate demand must equal the ex-ante aggregate supply. Ex-ante aggregate demand is made up of aggregate demand, which consists of consumption and investment. At equilibrium, savings and investment must also be equal.
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