When national income is at less than full employment national income, by how much must aggregate demand be increased to achieve full employment? (A) The amount by which the equilibrium level of national income falls short of the full employment level (B) The amount by which injections exceed withdrawals at the full employment level of output (C) The amount by which national income exceeds aggregate demand at full employment level of national income (D) The size of BoP deficits at its full employment level of national income

UoH 2013 Question 46: Keynesian cross and the multiplier

When national income is at less than full employment national income, by how much must aggregate demand be increased to achieve full employment?

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Keynesian cross and the multiplier has come up 167 times in 7 exams since 2006.

This question is on Deflationary and inflationary gaps, part of Keynesian cross and the multiplier in Macroeconomics.

The gap between equilibrium and full-employment output, and Keynesian involuntary unemployment.

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