Question

At the equilibrium level of income in the Keynesian model, which of the following statements is nottrue?

a. The economy is at full employment.

b. Planned spending equals actual output.

c. There are more unemployed resources.

Answer 1

c. There are more unemployed resources.

Step-by-step explanation:

Equilibrium level of income is the level of income where aggregate supply in the economy is consistent with aggregate demand. that is the level of income planned savings is equal to planned expenditure. the equation can be written as S = I. where S = savings and I = investments

At equilibrium income level, aggregate expenditure is equal to aggregate output. The equilibrium equation can be written as Y = C+I+G+X-M where

Y = national income, I = investment expenditure of the firm, G = government expenditure on goods and services, X = export, M = import.