Return to top. Keynesian economics is a theory of total spending in the economy (called aggregate demand) and its effects on output and inflation. Although the term has been used (and abused) to describe many things over the years, six principal tenets seem central to Keynesianism.The first three describe how the economy works.1.. A Keynesian believes that aggregate demand is influenced by a host of economic decisionsâboth public and privateâand sometimes behaves erratically. The public decisions include, most prominently, those on monetary and fiscal (i.e., spending and tax) policies.
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