Aggregate Supply (AS)

Aggregate supply is that amount of money income received by the entrepreneur through the sale of produced goods at the given level of employment. The minimum expected money incomes arising from the sale of output resulting from a given amount of employment is called aggregate supply of that output. A schedule of the minimum amounts […]

Principle of Effective Demand

In ordinary sense, demand means desire, It becomes effective when income is spent in buying consumption goods and investment goods. Keynes used the term ‘effective demand’ to denote the total demand for goods and services at various levels of employment. Different levels of employment, represent different levels of aggregate demand. In Keynes’ word, “The value […]