If markets do not self-adjust, how can a decline in spending lead to a negative process that ruins...

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If markets do not self-adjust, how can a decline in spending lead to a negative process that ruins an economy? How are they related to the Keynesian Cross and/or the Aggregate Demand/Aggregate Supply Diagram

David · Accepted Answer

If markets do not self-adjust, how can a decline in spending lead to a negative process that ruins 
an economy? How are they related to the Keynesian Cross and/or the Aggregate 
Demand/Aggregate Supply Diagram 
Answer: 
As per Keynes, aggregate demand is very important for an economy’s growth as demand creates 
its own supply.

If markets do not self-adjust, how can a decline in spending lead to a negative process that ruins an economy? How are they related to the Keynesian Cross and/or the Aggregate Demand/Aggregate Supply...

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