Keynesian Theory Of Income – Economics-dictionary

September 14, 2022 1 Min read Views 103 BLOG

The Keynesian Theory of Income describes the relationship between national income and unemployment. It states that when an economy generates its full capacity of income, it is at an equilibrium state. However, this equilibrium state does not mean that full employment is achieved. In fact, unemployment may persist at this equilibrium level, a situation called an ‘underemployment equilibrium’.

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