What is a simple Keynesian model?

The Simple Keynesian Model emphasizes that a decrease in aggregate demand can lead to a stable equilibrium with substantial unemployment. It is also known as the Keynesian Cross. You can read about the Monetary System – Types of Monetary System (Commodity, Commodity-Based, Fiat Money) in the given link.

The simple Keynesian model shows its ability to demonstrate the possibility of a stable equilibrium at less than full employment.

Further readings:

  1. National Institution for Transforming India (NITI Aayog) – A Brief Overview
  2. Monetary Policy – Objectives, Roles and Instruments (UPSC Indian Economy)

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