Question

write three basic assumptions related to equilibrium GDP​

Answer 1

Answer:

Like any economic theory, Keynesian economics relies on a set of fundamental assumptions. The three most noted assumptions are rigid or flexible prices',500,400)">inflexible prices, effective demand, and important savings and investment determinants other than the interest rate.

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by pravallika.

Answer 2

Explanation:

1. Demand creates its own supply.

2. The aggregate price level remains fixed. This means that all variables are real variables and all changes are in real terms.

Therefore if aggregate demand increases, output will increase, prices remaining the same. And due to the existence of excess production capacity and unemployed resources (especially manpower) the economy will reach the point of full employment — if there is sufficient demand stimulation.

3. The economy has excess production capacity.

4. The economy is closed — there is no export and import.