DEFINITION
Keynesian economics are the various macroeconomic theories about how in the short run – and especially during recessions – economic output is strongly influenced by aggregate demand.
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KEYNESIAN THEORY
Keynes and classical economics. Keynes begins the General theorywith a summary of the classical theory of employment as he saw it, which he encapsulates in his formulation of Say's Law as the dictum 'Supply creates its own demand'.
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