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21 October, 04:07

According to keynes what households plan to save always equals

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  1. 21 October, 08:04
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    According to Keynes, the amount that households plan to save is always equal to the amount that the firms plan to invest (if the aggregate supply is to be equal to the aggregate demand).

    According to Keynes, the aggregate demand is dependent on the households' plan to consume and save, while the aggregate supply is dependent on the plan of the producers to produce goods and services. There is no reason to believe that both the aggregate supply and aggregate demand will always be equal.

    However, there is a certain level of output/production and income, that would result in a situation where the aggregate demand will equal the aggregate supply.
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