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Keynesian general theory

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Analyze the effects of an increase in the money supply within the Keynesian model where the price level and money wage is fixed. Include in your answer the effects on real income, the price level and the interest rate. Discuss any three reasons why Keynesian assume the money wage is fixed and in particular, rigid or inflexible downward.

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Keynesian general theory is utilized.

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  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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