O'Reilly logo

Managerial Economics by Vanita Agarwal

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Chapter 19

Keynesian Model of Income Determination in Three-sector and Four-sector Economies

After studying this chapter, you should be able to understand:

  • Three main activities of the government are government expenditure, transfers and taxes.
  • Income leakages are in the form of saving and taxes, and injections in the form of investment and government expenditure.
  • There are two approaches to income determination in a three-sector model, aggregate demand–aggregate supply approach and leakages equals injections approach.
  • An economy can achieve a full employment output by an expansion in its budget, financing every rupee of additional expenditure with a rupee of additional taxes.
  • Introduction of government transfer payments has an expansionary ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required