GENERAL KNOWLEDGE

Detailed explanation-1: -Therefore, the correct option is: D. Change in quantity of money-change in rate of interest-change in investment-change in employment and output-change in price level.

Detailed explanation-2: -The Keynesian theory assigns a key role to money. It contends that a change in the money supply can permanently change such real variables as the interest rate, the levels of employment, output and income. Keynes believed in the existence of unemployment equilibrium in the economy.

Detailed explanation-3: -According to the Keynesian cause and effect sequence, the money supply’s fall would lead to a rise in interest rate. If the quantity of money falls, the cost of supplying the money rises. Thus, in the economy, the cost of investment demand also rises, and investors prefer to invest less.

Detailed explanation-4: -Its concept is simple. Spending from one consumer becomes income for a business that then spends on equipment, worker wages, energy, materials, purchased services, taxes, and investor returns. That worker’s income can then be spent, and the cycle continues.