Goodsmarket:  Reaching full employment
Channel: Werner Lost
Date: 2012-01-20

In this goods market model the economy can be in equilibrium at a point less than full employment and there are no forces that will automatically move it to full employment.  In this goods market model, which is a Keynesian model, the demand for goods determines the level of output  and output. It therefore follows that to increase the level of output and income demand for goods must increase.  This can be brought about by an increase in autonomous spending and/or the multiplier.