Keynesian Cross. In the keynesian cross diagram if the aggregate expenditure line intersects the 45 degree line at the level of potential gdp then the economy is in sound shape. The keynesian cross diagram depicts the equilibrium level of national income in the g s market model.
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A graphical depiction created by students of keynes in order of exposition for his basic ideas. From the 1930s until the 1970s keynesian economics was usually explained with a different model known as the expenditure output approach. Equilibrium in the keynesian cross model is achieved when everyone s spending plans are realized.
From the 1930s until the 1970s keynesian economics was usually explained with a different model known as the expenditure output approach.
There is no recession and unemployment is low. Real gnp y is plotted along the horizontal axis and aggregate demand is measured along the vertical axis. A graphical depiction created by students of keynes in order of exposition for his basic ideas. But there is no guarantee that the equilibrium will occur at the potential gdp level of output.
