Small macro disturbances can lead to much larger macro problems.
The economy self adjusts to reach full employment and a stable price level.
Equilibrium GDP is consistent with full employment.
Equilibrium GDP is consistent with price level stability.
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Home » Business » A basic conclusion of Keynesian analysis is that: Small macro disturbances can lead to much larger macro problems. The economy self adjusts to reach full employment and a stable price level. Equilibrium GDP is consistent with full employment.