According to John Maynard Keynes, employment depends upon effective demand. Effective demand refers to the total demand for goods and services in an economy at a given price level and at a particular point in time. It is the combination of demand from consumers, businesses, and the government.
Option 1, aggregate demand, is similar to effective demand as it also represents the total demand in an economy. However, aggregate demand includes all types of demand, whereas effective demand specifically focuses on demand that can be fulfilled given the available resources and production capacity.
Option 2, aggregate supply, refers to the total supply of goods and services in an economy. While aggregate supply is an important factor in determining overall economic output, it is not directly related to employment according to Keynes. Keynes believed that employment is primarily driven by demand rather than supply.
Option 4, rate of interest, is not directly related to employment according to Keynes. Although interest rates can impact investment and spending, they are not considered the primary driver of employment in Keynesian economics.
In summary, according to Keynes, employment depends upon effective demand, which represents the total demand for goods and services in the economy.