Identify the tools of the Keynesian theory of economic growth

      

Identify the tools of the Keynesian theory of economic growth

  

Answers


Dana
Effective demand: that is; unemployment is caused by deficiency in effective demand so the solution is to raise consumption
Propensity to consume: that is when the marginal propensity to consume is high, output and employment will increase
Propensity to save: according to Keynes, low propensity is good for the economy and employment as it allows for extra cash for consumption spending
Marginal efficiency of capital: the marginal efficiency of capital or how efficient capital is used enhances investments and output
Rate of interest: it is critical in determining investments where high interest rates discourage investments and vice versa as high interest rates make capital expensive.
The multiplier: Keynes argued that the rate of growth, employment and income will be determined by his multiplier.

Dana05 answered the question on July 3, 2019 at 11:36


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