New Register here for RBI, SEBI & NABARD strategy workshop! April 9 at 7 PM

    Question

    Which of the following statements is/are CORRECT under

    the Keynesian Cross (Fixed Price) Model?
    A The product market and factor market independently determine the full-employment level of output Correct Answer Incorrect Answer
    B Output is determined in the product market by the aggregate expenditure. Correct Answer Incorrect Answer
    C Money market determines the price level, given the quantity of money and the level of output. Correct Answer Incorrect Answer
    D Both b and d Correct Answer Incorrect Answer

    Solution

    As per the Keynesian Cross (Fixed Price) Model, output is determined in the product market by the aggregate expenditure and Employment is determined in the factor market by the output level determined in the product market.

    Practice Next