What are the equilibrium conditions in the Keynesian model of income determination?

(A) Aggregate demand = Aggregate supply.

(B) Savings= Investment.

(C) Consumption=Government Expenditure.

(D) Planned Expenditure= Planned Output.

Choose the correct answer from the options given below:

Option 1 -> Includes only (A) and (B), but misses (D) which is also a valid equilibrium condition.

Option 2 -> Incorrectly includes (C) - Consumption does not need to equal Government Expenditure at equilibrium.

Option 3 -> Incorrectly includes (C) and misses (B) which is a fundamental equilibrium condition.

Option 4 -> Correctly identifies all three equilibrium conditions: (A), (B), and (D).

Hence, Option 4: (A), (B) and (D) only -> In the Keynesian model, equilibrium is achieved when: (A) Aggregate Demand equals Aggregate Supply - this is the fundamental equilibrium condition; (B) Savings equals Investment - derived from the national income identity (Y = C + I, and Y = C + S, therefore S = I at equilibrium); and (D) Planned Expenditure equals Planned Output - this is essentially the same as condition (A), stating that what is planned to be spent must equal what is planned to be produced. Statement (C) is incorrect as consumption and government expenditure are independent components of aggregate demand with no requirement to be equal at equilibrium. -> correct