Keynes argued that inadequate overall demand could lead to prolonged periods of high unemployment. Business and economic growth will be promoted if the level of investment throughout a country or a society exceeds its savings rate, this is the basic principle of Keynesian theory. You can read about the Monetary System – Types of Monetary System (Commodity, Commodity-Based, Fiat Money) in the given link.
An economy’s output of goods and services is the sum of four components: consumption, investment, government purchases, and net exports as per Keynesian economic theory.
Further readings:
- Inflation in Economy- Types of Inflation, Inflation Remedies [UPSC Notes]
- Indian Economy Notes For UPSC Exam [Download PDFs]
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