In the simple Keynesian model, stability of equilibrium exists, if:

CA Foundation · Business Economics · MTP · September 2026
In the simple Keynesian model, stability of equilibrium exists, if:
(A) A. APC is less than one.
(B) B. APS is less than one.
(C) C. MPC is less than one.
(D) D. None of the above.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. APS is less than one.

Topics: Determination of National Income

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