Keynes Believed That for Aggregate Supply to Equal Aggregate Demand

question 204

Short Answer

Keynes believed that for aggregate supply to equal aggregate demand at equilibrium GDP a necessary condition was that total _______ and total _______ must be equal.

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Definitions:

Excessive Reserves

Funds held by banks over and above the legal reserve requirement, not required but possibly maintained for additional safety or for other purposes.

Required Reserves

Required Reserves are the portion of depositors' balances that banks must have on hand as cash, according to central bank regulations.

Actual Reserves

The physical quantity of a resource or commodity that is known to be available and extractable under current conditions.

Reserve Requirement

The minimum amount of reserves that banks are required to hold by law, set by the central bank to control money supply.