The Keynesian model provides a framework for understanding how changes in aggregate demand can impact an economy.
What is the economy about?
In a recession, there is typically a decline in aggregate demand, leading to reduced economic activity, lower output, and higher unemployment. Keynesian economics suggests that government intervention can help stabilize the economy.
In Keynesian economics, a recession is typically analyzed through the lens of aggregate demand and the overall level of economic activity. The key idea is that during a recession, there is a deficiency in aggregate demand, leading to a decline in production, employment, and income. The Keynesian model suggests that government intervention can help stabilize the economy and promote recovery.