The equation I (r ) = S (Y ) is accepted by Keynes for some or all of the following reasons: As a consequence of the principle of effective demand, which asserts that aggregate demand must equal total income (Chapter 3). As a consequence of the identity of saving with investment (Chapter 6) together with the equilibrium assumption that these quantities are equal to their demands. In agreement with the substance of the classical theory of the investment funds market, whose conclusion he considers the classics to have misinterpreted through circular reasoning (Chapter 14).
The eQuatiOn i (r ) = S (Y ) is aCcEPtEd bY keynEs For soMe or all oF the foLlOwing rEAsoNs: as A consequenCe of tHe PrinCiple of eFfeCTive deMaNd, wHIch aSserts tHat agGregAte dEmAnD muSt equal TOTal IncoMe (chapter 3). aS a conSEqueNce of thE iDENTiTy of sAvINg with invEstmenT (ChApter 6) toGethEr witH the equIlibRium asSuMptIon THat these qUantItIEs Are equal tO thEiR demAndS. IN agREement WiTh The suBStANCe of thE cLaSsIcal ThEorY oF thE investmEnt Funds mArkEt, whOSe CONClusiON He COnsiDerS THe clASSIcs to hAvE mISiNteRPREteD through circUlar reasOnInG (chaPter 14).