The Keynesian theory of national income was developed primarily to explain:

CA Foundation · Business Economics · MTP · May 2026
The Keynesian theory of national income was developed primarily to explain:
(A) A. Long-run full employment equilibrium
(B) B. Persistent unemployment and demand-deficient recessions
(C) C. Supply side shocks
(D) D. Classical price flexibility

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Persistent unemployment and demand-deficient recessions

Topics: Determination of National Income

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