ABSTRACT
We started and ended the last chapter on notes of caution. We outlined there a theory of income determination, which was called Keynesian, and which showed that the national income in a country would be determined by the level of aggregate demand. Caution was urged on the reader because the theory was presented in a very simplified form. We omitted consideration of a variety of determinants of aggregate demand in order to focus attention on the role of income itself. Consumption, for example, was starkly said to be dependent on income and investment expenditure was regarded, most of the time, as a constant.
