Macroeconomic Equilibrium as per Keynesian Theory

Authors:

Prabhav Sharma

Abstract

Notions and assumptions been drawn from Keynesian theory derived from General theory of economics would be traced for drawing exemptions or proving newer notions in this paper. In, first passage article begins with examination of Keynesian’s assumption that “market equilibrium does not lead to fuller employment of resource and manpower” and proves change in stock would fluctuate proportionally with rise and fall of demand. By, analyzing given assumption of theory author even traced implication of streak perception over decision-making in process of price determination. Further, taxation accounted as leakages in 5-sector economy assumed desirable in risen general price level of economy it’s implication with response of consumer and producer and given level of elasticity for demand and supply is been evaluated by the author. The outcomes violated pre-drawn presumption if, elasticity of supply exceeds or decision of authority leads reduction of tax collection. Thus, assessment of elasticity of demand and supply is justified by author.