Questions

J.M Keynes’ theory of employment is a demand-deficient theory. This means that Keynes visualised employment from the demand side of the model. His theory is a demand-oriented approach, as opposed to the classical supply side model.

According to him,the volume of employment in a country depends on the level of effective demand of people for goods and services. Thus, unemployment is attributed to the deficiency of effective demand.

Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes.

In other words, large sellers selling the products that are similar, but not identical and compete with each other on other factors besides price.