Trusted by millions of Kenyans
LoginRegister
Study resources on Kenyaplex

Get ready-made curriculum aligned revision materials

Exam papers, notes, holiday assignments and topical questions – all aligned to the Kenyan curriculum.

Browse exam papers
Or go directly to:
Class notes Holiday assignments Topical questions Other resources

Identify the tools of the Keynesian theory of economic growth

Identify the tools of the Keynesian theory of economic growth

Answers

Dana
Effective demand: that is; unemployment is caused by deficiency in effective demand so the solution is to raise consumption
Propensity to consume: that is when the marginal propensity to consume is high, output and employment will increase
Propensity to save: according to Keynes, low propensity is good for the economy and employment as it allows for extra cash for consumption spending
Marginal efficiency of capital: the marginal efficiency of capital or how efficient capital is used enhances investments and output
Rate of interest: it is critical in determining investments where high interest rates discourage investments and vice versa as high interest rates make capital expensive.
The multiplier: Keynes argued that the rate of growth, employment and income will be determined by his multiplier.
Dana05 answered the question on July 3, 2019 at 11:36

Answer Attachments

Next: State the assumptions of the Keynesian theory of economic growth

Previous: What is a strategy?

View more Economics Questions and Answers  |  Return to Questions Index

Exams With Marking Schemes

Related Questions