John Maynard Keynes

The aggregate expenditure model of John Maynard Keynes concentrates on the correlation between aggregate expenditure and income. Keynes applied the income-expenditure approach to explain that real GDPs equilibrium level may not signify real GDPs normal level (Tucker 2008). In the income-expenditure framework, real GDPs equilibrium level is real GDPs level that is in agreement with the existing aggregate expenditure level (Tucker 2008).