Macroeconomics: Income and Output Determination

The theoretical output level where all resources are fully employed

The overall level of supply that meets aggregate demand

The total income generated in an economy over a specific period

The quantity of goods and services that consumers are willing and able to purchase at a given price level (correct)

Classical theory rejects the concept of effective demand, while Keynesian theory supports it.

Both theories advocate for extensive government intervention in the economy.

Classical theory suggests markets are always clear, whereas Keynesian theory emphasizes market imperfections. (correct)

Keynesian theory asserts that all economies naturally reach equilibrium, while classical theory does not.

It represents the total quantity of goods and services that producers are willing to supply at different price levels. (correct)

It is the measure of total spending in the economy by households and businesses.

It reflects only the services supplied in the economy, ignoring goods.

It indicates the fixed capacity of an economy to produce at a maximum level.

<p>Keynesian economics argues that demand can drive economic growth, while classical economics believes supply is the primary driver.</p> Signup and view all the answers

<p>To provide a comprehensive measure of a nation's economic activity, including production, consumption, and investment.</p> Signup and view all the answers