Ideas of Keynesian Economics

1. National income depends on the amount of employment. 2. The marginal propensity to consume is less than 1. 3. Employment results from consumption and investment. 4. The system rests, in equilibrium, with excess capacity. 5. Employment could be increased if workers accepted lower wages, because it would make lower investments by business profitable, but wages are sticky. 6. To increase employment and achieve full employment, spending must be increased. 7. All spending is equal. 8. Since consumer spending and investment are stuck, the government must increase spending to restore full employment. 9. All spending is subject to a multiplier effect. 10. The government can supplement spending until full employment is reached without inflation