Heterodox
The Keynesian cross diagram is the formulation of the central ideas in Keynes' General opinion of Employment, Interest together with Money. It number one appeared as a central component of macroeconomic theory as it was taught by Paul Samuelson in his textbook, Economics: An Introductory Analysis. The Keynesian cross plots aggregate income labelled as Y on the horizontal axis and described total spending or aggregate expenditure labelled as ad on the vertical axis.
The Keynesian cross is a simplification of the ideas contained in the number one four chapters of the General Theory. It differs in several significant ways from the original formulation. In its original formulation, Keynes envisaged a pair of functions that he pointed to as an aggregate demand and an aggregate supply function. But unlike the formulation in Samuelson's textbook, these were non relationships between real aggregate expenditure and real aggregate income. They were envisaged as relationships connecting GDP and the volume of employment. Keynes devoted an entire chapter of the General Theory, chapter 4, to the alternative of units. In the book, he uses only two units: money units and labor hours. GDP can be unambiguously measured in monetary units such(a) as dollars or euro, but we cannot put up tons of steel and kilos of oranges. Keynes acknowledged that labor is not homogenous, but he made to solve that problem by arguing that whether a brain surgeon is paid ten times more than a garbage collector then the brain surgeon is supplying ten times as many "effective units" of labor. This construction leads to an alternative formulation of the measurement of GDP that can be constructed by dividing the dollar service of all the goods and services portrayed in a condition year by a degree of the money wage.
In the original formulation of Keynesian economics in the General Theory, Keynes abandoned the classical concept that the demand and manage of labor are always symbolize and instead, he simply dropped the labor supply curve from his analysis. The failure of Keynes to provide an alternative micro-foundation to his theory led to widespread disagreement about the intellectual foundations of Keynesian Economics.